Lloyd Blankfein smells blood in the water.
The Goldman Sachs CEO is taking dead aim at Morgan Stanley’s most prized assets — its best and brightest employees — after his rival decided to defer pay for senior bankers.
Blankfein, as a big game hunter, recently landed 13-year Morgan Stanley veteran Kate Richdale, head of its Asia Pacific investment banking business.
The CEO’s talent hunt is continuing, sources said. Goldman currently is in selective talks with other Morgan Stanley bankers and has also lured a handful of traders from the bank.
The classic Wall Street maneuvering comes months after Morgan Stanley told some execs it would defer pay, including their cash bonuses, over three years — a move that caused some bankers to grouse.
James Gorman, 54, who took over as CEO for John Mack in 2010, has been aggressively trying to reshape the white-shoe investment bank into a Wall Street firm more reliant on steady revenues from brokerage and less on riskier trading.
Gorman has been thinning the firm’s investment-banking ranks in a bid to cuts costs.
Goldman, which has cut its own ranks, but has not changed for the vast majority of its employees how cash bonuses are paid out, has been licking its chops.
“It’s a good time to take good people [from Morgan Stanley],” said one Goldman insider. It is unusual for the firm to recruit from Morgan Stanley. Normally Goldman prefers to grow its talent organically.
“People who you thought wouldn’t consider moving are now at least taking our calls,” said one source.
People familiar with Goldman’s hiring say that the bank has hired about half a dozen Morgan Stanley employees and is in serious talks with another half-dozen.
A Goldman spokesman declined to comment, as did a Morgan Stanley spokesman.
However, one MS insider, told of Goldman’s moves, said the bank isn’t facing any serious poaching from its rival.
Morgan Stanley’s attrition rate, according to one insider, is rather low.
Although Gorman hasn’t forsaken his investment bankers, the Morgan CEO has made it clear that he’s hitched the firm’s fortune to the success of its roughly 17,000-strong brokerage unit.
After fits and starts, that business, run by President Greg Fleming, is starting to show promise, posting profit margins of 17 percent in the bank’s most recent quarter.
But losing investment-banking pros to a longtime rival like Goldman may still smart.
Both banks jockey for top spots in Wall Street’s mergers-and-acquisitions and equity rankings, and Morgan has been losing ground.
The company’s global investment-banking business slipped from No. 3 two years ago to No. 5 this year, according to Dealogic.
To be sure, Morgan Stanley continues to be viewed as one of the top banks but has had a few stumbles.
Morgan Stanley found itself on the outside looking in on $24.4 billion leveraged buyout of Dell Inc., with a number of banks including JPMorgan Chase and Goldman playing roles.
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