What we’re reading (8/21)
“Goldman Sachs Weighs Selling Part Of Wealth Business In Broad Strategy Revamp” (U.S. News & World Report). “Goldman Sachs is weighing the sale of a part of its wealth business, it said on Monday, as it shifts its focus back to serving the ultra-rich and away from high-net-worth clients in mass markets. The Wall Street bank is evaluating alternatives for its registered investment adviser (RIA) unit, called Personal Financial Management (PFM), which manages about $29 billion, it said in a statement.”
“Betting Against U.S. Debt Has Cost Ackman This Year” (Institutional Investor). “The short of 30-year U.S. Treasuries, first undertaken in April of 2022, cost Pershing Square Holdings 4.1 percentage points during the first half of the year, according to a just-released semiannual report to investors. The bet was the biggest loss for the portfolio, whose gross gains were 10.9 percent for the six-month period. During that time Pershing Square drastically underperformed the stock market, which gained 16.9 percent during the same time.”
“Subway Sandwich Chain Nears Sale” (Wall Street Journal). “Roark Capital is nearing a deal to buy the Subway sandwich-shop chain for about $9.6 billion. After a long, heated auction, a deal for the closely held company could be finalized this week, people familiar with the matter said. Roark has been battling it out with a group of rival private-equity firms including TDR and Sycamore, and in recent days pulled ahead.”
“What Happens To All The Stuff We Return?” (The New Yorker). “Most online shoppers assume that items they return go back into regular inventory, to be sold again at full price. That rarely happens. On the last day of the R.L.A. conference, I joined a ‘champagne roundtable’ led by Nikos Papaioannou, who manages returns of Amazon’s house-brand electronic devices, including Kindles, Echos, and Blink home-security systems. He said that every item that’s returned to Amazon is subjected to what’s referred to in the reverse-logistics world as triage, beginning with an analysis of its condition. I asked what proportion of triaged products are resold as new. ‘It’s minimal,’ he said.”
“Is David Solomon On His Way Out At Goldman Sachs? The CEO Whisperer Weighs In” (CNN Business). “There are several reasons that all of this is happening right now. One is that we went through a recent era of lionizing CEOs, and now the pendulum has swung back to where we’re quick to vilify them. There’s just an outsized focus on short-term performance instead of long-term change when it comes to CEOs. But if you look at the five-year arc of David Solomon, the company is up by over 50% on nearly every performance measure.”
