Goldman Sachs' cohead of investment banking is jumping ship to be CEO of a Michael Dell-backed investment firm. Read the full memos the bank just sent about the exit — and who's replacing him.

Goldman Sachs' cohead of investment banking is jumping ship to be CEO of a Michael Dell-backed investment firm. Read the full memos the bank just sent about the exit — and who's replacing him.

November 16, 2020
  • Goldman Sachs veteran Gregg Lemkau, co-head of the firm's investment banking division since 2017 and a member of Goldman's management committee, is departing at the end of 2020.
  • Lemkau will be succeeded by Jim Esposito, Goldman's global co-head of the global markets division, who will step into Lemkau's role on Jan. 1.
  • Lemkau is heading to Michael Dell-backed MSD Partners, where he will be CEO of an investment firm that manages more than $15 billion in assets, according to a separate statement from MSD Partners.
  • Goldman CEO David Solomon has known about Lemkau's decision for a while, and the two men, who are close, spent some time a couple weekends ago talking it through, a person familiar with the conversation told Business Insider. 
  • Visit Business Insider's homepage for more stories.

The upper echelons of one of Goldman Sachs' most prestigious businesses, its investment banking division, are about to undergo a big leadership transition.

Gregg Lemkau, co-head of the firm's investment banking division since 2017 and a member of Goldman's management committee, is departing the firm at the end of 2020. He will be succeeded by Jim Esposito, Goldman's global co-head of its global markets division, who will step into Lemkau's role on Jan. 1.

Goldman Sachs announced the news about Lemkau's departure in two internal memos sent to Goldman's worldwide workforce by CEO David Solomon on Monday.

"As co-head of IBD, Gregg has helped lead our efforts to continue to solidify and grow our preeminent investment banking franchise around the world," David Solomon, Goldman's CEO, wrote in a memo reviewed by Business Insider.

"During his more than 28-year tenure at the firm, he has advised on hundreds of transactions, and has spent significant time advising our clients across all sectors globally while working in our offices in the US and in Europe," Solomon added.

Lemkau is heading to Michael Dell-backed MSD Partners, where he will be CEO of an investment firm that manages more than $15 billion in assets, according to a separate statement from MSD Partners announcing the news.

Esposito is a 25-year Goldman veteran who first joined the firm in 1995 as a salesperson for emerging markets debt. He became an MD in 2002 and partner in 2006. As incoming co-head of investment banking, he will work alongside Dan Dees, Lemkau's current investment banking cohead, who will retain his role.

Lemkau — whose sister Kristin is a top Wall Street executive in her own right, running JPMorgan Chase's wealth division — has been at Goldman Sachs since 1992, when he started as an analyst in mergers and acquisitions, a group he eventually ran before becoming co-head of investment banking. He was named an MD at Goldman in 2001 and partner in 2002.

Read more: How JPMorgan's Kristin Lemkau is planning to turbocharge the firm's $500 billion wealth business, from a rebrand and ramping up advisor training to new tech

In his memo announcing Esposito's move, Solomon praised him as having "a deep understanding of our corporate and institutional clients."

"We look forward to benefiting from his significant expertise as we further grow our market share, expand our client footprint, and offer new solutions, with the goal of delivering the best of Goldman Sachs to our clients," Solomon added.

Lemkau's exit and Esposito's move to co-head the investment banking division means that Wall Street's top bank for mergers and acquisitions will be led by two people with experience in other areas.

Esposito, while the once chief operating officer of the division, has a lot of experience in raising debt and equity for clients, while Dees, who has run the division alongside Lemkau since 2018, came up through the technology business.

Goldman thinks so highly of the technology, media, and telecom business that it tapped seven new partners from that business in its latest round of promotions, or 37% of the 19 total investment bankers who got the promotion.

Read more: Meet the 7 new partners in Goldman Sachs' elite TMT division, advising on high-profile tech IPOs and deals for clients like Snowflake, Shopify, and Netflix

Lemkau's departure for MSD Partners shows that even for those near the top of Goldman Sachs, there are other areas of finance that promise larger paydays.

That's despite Solomon's attempts to make the partnership even more lucrative. Earlier this year, the Wall Street Journal reported that Goldman was going to give partners more carried interest in its private equity funds, and would lend $500 million in total to partners to help them leverage those returns.

Solomon has known about Lemkau's decision for some time, and the two men, who are close, spent some time a couple weekends ago talking it through, a person familiar with the conversation told Business Insider. 

Lemkau, the person said, has spent his entire career at Goldman and wanted to try something new. He and John Waldron, Solomon's lieutenant and a man in line to take over the CEO's role, are roughly the same age, leaving Lemkau with fewer options to move higher into Goldman's management ranks, the person said.

Here are the full memos that Goldman Sachs CEO David Solomon sent to staff on Monday announcing the news of Gregg Lemkau's departure and Jim Esposito's promotion.

November 16, 2020

Gregg Lemkau to Retire From Goldman Sachs

Gregg Lemkau, co-head of the Investment Banking Division (IBD) and a member of the Management Committee, will retire from the firm at the end of the year.

As co-head of IBD, Gregg has helped lead our efforts to continue to solidify and grow our pre-eminent investment banking franchise around the world. During his more than 28-year tenure at the firm, he has advised on hundreds of transactions, and has spent significant time advising our clients across all sectors globally while working in our offices in the US and in Europe. The firm has benefitted greatly from Gregg's deep and expansive understanding of industries and markets, as well as his distinctive client service mindset.

Gregg has also been instrumental in supporting our commitment to driving sustainable inclusive economic growth, helping conceive of and implement our board diversity initiative.  He has partnered closely with our clients to improve their diversity representation pre-IPO, and through this critical work has underscored our firm's conviction in the importance of having diverse voices represented at the table, both in business and society more broadly.

In addition, Gregg has been a steward of the firm's culture of teamwork and excellence throughout his nearly three decades at Goldman Sachs, and has been a key developer of talent and a mentor to so many of our current and future leaders.  He has also sponsored a number of important programs to support our people, such as events organized by the Goldman Sachs Veterans Network and our Veterans Integration Program.  

Gregg has served with excellence since he joined us as an analyst in 1992 in Mergers & Acquisitions.  Prior to assuming his current role as co-head of IBD, Gregg was co-head of Global Mergers & Acquisitions.  He has also served as global co-head of the Technology, Media and Telecom Group, global co-head of the Healthcare Group and chief operating officer for the Investment Banking Division.  Gregg is a member of the IBD Executive Committee, and previously served as chairman of the Firmwide Commitments Committee from 2011 to 2015 and as a member of the Partnership Committee.  He was named managing director in 2001 and partner in 2002.

Please join me in thanking Gregg for his many contributions to the firm, our clients and our people, and in wishing him and his family the very best in the years ahead.

David M. Solomon

 

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November 16, 2020

Jim Esposito to Become Global Co-Head of the Investment Banking Division

I am pleased to announce that Jim Esposito will become global co-head of the Investment Banking Division, effective January 1. Ashok Varadhan and Marc Nachmann will continue to serve as global co-heads of the Global Markets Division.

In his new role, Jim will partner with Dan Dees, who has served as co-head of the division since 2018, to help lead our efforts to continue to grow our investment banking franchise across industries around the world.

Jim has 25 years of experience at Goldman Sachs, and a deep understanding of our corporate and institutional clients. We look forward to benefitting from his significant expertise as we further grow our market share, expand our client footprint and offer new solutions, with the goal of delivering the best of Goldman Sachs to our clients.

Jim currently serves as global co-head of the Global Markets Division. In this role, he has helped advance our efforts to deliver the full range of our FICC and Equities products to our clients, including by harnessing technology to provide more efficient market access and an enhanced client experience.

Prior to joining the Global Markets Division, Jim was a senior leader in Investment Banking, where he served as co-head of the Global Financing Group and chief operating officer of the division.  Jim joined Goldman Sachs in 1995 as a salesperson for Emerging Markets Debt and was named managing director in 2002 and partner in 2006.

Jim is a member of the Management Committee, European Management Committee, Firmwide Risk Committee and Global Markets Division ExecComm.

Please join me in congratulating Jim on his new role, and in wishing him, Dan and our Investment Banking teams continued success.

David M. Solomon

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