Goldman Sachs' latest ECM exit bodes badly for all the MDs hanging on in there

If you're an equity capital markets banker in London, and you're waiting for this year's bonus, you probably don't want to spend too long thinking about Antoine de Guillenchmidt, who has just left Goldman Sachs, around three and a half months before bonuses are announced. 

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Financial News reported de Guillenchmidt's exit earlier today. No reason for his exit was given, and Goldman declined to comment further. De Guillenchmidt himself didn't respond to an invitation to elaborate. 

For seasoned ECM observers, however, de Guillenchmidt's disappearance late in the year is symptomatic of the dire state of ECM and all who work within it. As the chart below, taken from the LSEG data team, shows, global IPOs were at an eight-year low in the first half of 2024. The European market is in a particularly sorry state. Last year, London IPOs were at their lowest level since 2009. In the first half of this year, proceeds raised from IPOs in London were down another 56% again.

Source: LSEG 

It's possible, therefore, that either Goldman decided it doesn't have a need for dual heads of ECM in London and that it will just stick with de Guillenchmidt's co-head, Richard Cormack, or that de Guillenchmidt decided to call it a day.

Seasoned ECM bankers in London suggest it's probably the latter. "Managing directors in ECM in Europe are on a road to nowhere," says one. "A lot of teams are top-heavy, and it's not seen as sustainable, but people are too scared to leave because it's difficult to get another job as a middle-aged man now."

De Guillenchmidt isn't the only departure from Goldman's ECM team this year. Mark Maislish, the firm's head of equity syndicate, left in February for Citadel, only to leave Citadel four months later. Goldman ranked third for European ECM in the first half of this year, down from first in 2023. 

Some ECM MDs are finding new jobs. After Angus Millar, the head of UK ECM at Morgan Stanley, was cut in 2023, he found a new job as head of European ECM at RBC Capital Markets. 

However, others are wondering whether it's still worth it. And with public markets equity issuance in the doldrums, ECM bankers are increasingly finding themselves repackaged as lowly "equity advisory bankers" instead. 

Equity advisory is the poor cousin of full-blooded ECM: "Equity advisory involves providing strategic advice to companies on matters related to equity transactions, typically for mergers & acquisitions (M&A), capital raising, restructuring, and shareholder engagement," says one insider. 

Although the fees for activist defence work can be high, he says the fees for most other kinds of equity advisory service are low. Worse, they're often shared with M&A bankers who begrudge ECM colleagues their portion. Senior ECM bankers are therefore working as hard as ever, for less money. 

This is why people are leaving the industry, or reinventing themselves. "All the smart ECM guys went into private capital markets a long time ago," says one veteran. Maybe this is where de Guillenchmidt will turn up next year.

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