Goldman Sachs Group Inc. (GS:US) said Julian Salisbury will become head of the global special-situations group, a unit that invests the firm’s own money and generated as much as $4 billion a year before the financial crisis.
Salisbury, 41, is replacing Jason Brown, who is retiring, New York-based Goldman Sachs said today in an internal memo. Salisbury will move to New York from London, where he has been head of the European special-situations group. Michael DuVally, a spokesman for the company, confirmed the contents of the memo.
The Special Situations Group, known as SSG, trades distressed debt and has made investments in companies from Japan’s largest golf-course operator to pizza-chain Sbarro Inc. In 2011, New York-based Goldman Sachs stopped including SSG’s results within fixed-income trading, and moved it into a new reporting segment called investing and lending that includes other proprietary investments.
The bank’s investing and lending division (GS:US) generated $5.89 billion in 2012, almost triple that of a year earlier. The unit gained $1.85 billion from debt securities and loans, and $2.39 billion from equity securities. The company doesn’t break out SSG’s results.
Salisbury, a U.K. citizen, was a founding member of the European SSG unit in 2003 and was named a partner at the firm in 2008, according to the memo, which was sent by Pablo J. Salame and Isabelle Ealet, co-heads of the securities division. Brown, who joined Goldman Sachs from Bear Stearns Cos. in 1999 and became a partner in 2006, had led the group from Hong Kong since 2011.
“Jason’s leadership has been instrumental in the design and execution of a realigned investment approach in GSSG, resulting in a diversified portfolio that has shown strong performance in both favorable and challenging market conditions,” Ealet and Salame wrote in a separate memo.
Reuters reported the management changes earlier today.
SSG produced $4.1 billion in 2007, 9 percent of the company’s total revenue. It generated $3.79 billion in 2006, according to documents released by a Senate subcommittee in 2011.
Goldman Sachs has faced questions about whether SSG’s activities would be crimped by the Volcker rule, which was part of the Dodd-Frank Act. Rules about how it will be implemented are still being written. The bank has argued that most of the unit is a lending business.
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