NEW YORK, Aug. 17, 2007 (PRIME NEWSWIRE) -- This week's Wall Street Journal Weekend Edition centerpiece examines how highly-paid Wall Street executives are striking out on their own to form private asset-management firms in an effort to receive bigger paydays.
The Journal will focus on Mark McGoldrick -- one of Goldman Sachs Group Inc.'s highest-paid employees, earning $70 million last year, and head of one of their most profitable units, who recently decided to leave the company to plan a hedge fund. After years of maintaining a grueling schedule scouring for investments, Mr. McGoldrick believes that he can make more money and work fewer hours by starting his own asset-management shop.
Mr. McGoldrick joined Goldman Sachs a decade ago amid an uncertain market and co-founded the firm's secretive "special situations group" -- an elite but opaque money-making machine that buys and sells eclectic assets. He began buying up bad debt and troubled investments in Asia in sectors including aircrafts, mortgages, spirits, and alternative-energy. His bets on the investments paid off with solid returns for Goldman Sachs, resulting in firm-wide recognition.
Over the last few years, Mr. McGoldrick switched his investments into more equity than debt, resulting in clashes with Goldman Sachs' other divisions, particularly Goldman Sachs' internal lists on conflicts of interest. He complained that executives at hedge funds and private-equity firms were receiving higher pay and that he and his subordinates hadn't been properly compensated for the assets they managed and the profits they produced. Fed up with bureaucracy and compensation perceived to be less than "market reality," Mr. McGoldrick resigned earlier this year.
"The star investor's rise and departure speaks volumes about how the money is being made these days," writes Monica Langley, the Journal's Washington Deputy Bureau Chief in this week's Weekend Edition. "For years, Goldman has been the securities industry's gold standard: The elite investment bank has been the world's most profitable, attracting talented bankers and traders who want to strike it rich. Mr. McGoldrick's success illustrates Goldman's willingness to risk its own capital to make unusual investments."
Ms. Langley adds, "Mr. McGoldrick's departure shows that even top Wall Street investment banks no longer have a lock on key employees. A few top traders at private-equity firms and hedge funds earn as much as $100 million a year, with more autonomy." Over the past two months, Goldman's shares have fallen 22.6% amid an increasingly volatile stock market and worries over the firm's risk-taking trades.
Additional stories appearing in this week's Weekend Edition of The Wall Street Journal include the following:
Money & Investing:
-- Turmoil for Investors: The turmoil in financial markets is a
particular concern for certain investors with much at stake:
retirees and those just about to retire, a group that must live
on the income their portfolios generate.
-- How to Maximize Returns and Minimize Risk: Where to park your cash
to maximize returns and minimize risk amid rising concerns about
various types of money-market funds and other short-term cash
investments.
Pursuits:
-- Luxury Destinations: As competition continues to heat up to find
the next luxury destination, the Journal looks at how the travel
industry creates these places -- and previews some of the hottest
spots to take a vacation in the coming year.
-- British Brands See U.S. as Land of Opportunity: British shirt
makers Thomas Pink and Charles Tyrwhitt are increasingly setting
their sights on the U.S., taking aim at classic American labels
like Brooks Brothers. Both have ambitious plans to blanket the
country with stores, not just in New York, but also in cities like
Charlotte, N.C., and Scottsdale, Ariz. Alfred Dunhill and Turnbull
& Asser, two other British clothing companies, also plan to open
more stores in the U.S. in the next few years. The British brands
see the U.S. as a land of opportunity because sales of luxury goods
like their $90-and-up shirts are booming.
-- Musical Hybrids: Why unlikely musical hybrids (glitch opera,
socaton, indie Hindi, new rave, skurban) are cropping up
everywhere -- and challenging a decades-old approach to
classifying music.
About The Wall Street Journal
The Wall Street Journal, the flagship publication of Dow Jones & Company (NYSE:DJ) (www.dowjones.com), is the world's leading business publication. Founded in 1889, The Wall Street Journal has a print and online circulation of nearly 2.1 million, reaching the nation's top business and political leaders, as well as investors across the country. Holding 33 Pulitzer Prizes for outstanding journalism, The Wall Street Journal provides readers with trusted information and knowledge to make better decisions. The Wall Street Journal print franchise has more than 750 journalists world-wide, part of the Dow Jones network of nearly 1,800 business and financial news staff. Other publications that are part of The Wall Street Journal franchise, with total circulation of 2.6 million, include The Wall Street Journal Asia, The Wall Street Journal Europe and The Wall Street Journal Online at WSJ.com, the largest paid subscription news site on the Web. In 2007, the Journal was ranked No. 1 in BtoB's Media Power 50 for the eighth consecutive year. The Wall Street Journal Radio Network services news and information to more than 280 radio stations in the U.S.
The WSJ Weekend Edition logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3504
Editor's Note: WSJ reporters are available to discuss these topics.