Inside the rise of Ram Sundaram, the leader of a secretive Goldman Sachs desk that's minting billions
Under CEO David Solomon, Goldman Sachs has marketed itself as a kinder, gentler investment bank — a "holistic" client adviser that served avocado toast at its first-ever investor day. So it came as somewhat of a surprise to insiders when Ram Sundaram was handed control of Goldman's currencies and emerging-markets business last month, solidifying his position as a senior leader in Goldman's mighty markets division. Sundaram, according to some who have worked with him, is a throwback to an eat-what-you-kill era on Wall Street. He's had a leading role over the past 15 years in some of the bank's most imaginative — and at times controversial — trades. For much of that time, he's worked from a secretive but powerful profit center hidden deep within Goldman. Long known as PFI, for Principal Funding and Investments, the unit is well known to Goldman's top brass and seldom touted. It regularly reaps nine-figure paydays, occasionally angering clients in the process. Business Insider spoke with more than a half-dozen current and former Goldman traders or clients to piece together the details of Sundaram's career and opinions of his management style. A Goldman Sachs representative said in a statement: "Working closely with our investment bankers, Ram and his team have brought their considerable skills to some of our most important clients, recently helping devise financing for great companies like T-Mobile and United Airlines that are navigating a very challenging economic landscape." SUBSCRIBE TO READ THE FULL STORY: Inside the rise of Ram Sundaram, the leader of a secretive Goldman Sachs desk that's minting billions by designing some of the bank's most imaginative — and controversial — tradesSEE ALSO: Inside Goldman Sachs' first investor day, where avocado toast and crab apples were served with tech talk, 3-year plans, and a surprising trading mea culpa SEE ALSO: Goldman Sachs just hired Kurt Hoffman, an expert in distressed situations and bankruptcy, to join a trading unit known for some of the bank's most lucrative deals SEE ALSO: Goldman Sachs is building an AI-powered digital assistant and checking account for its Marcus consumer bank. Here's how it's shaping up. Join the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
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GOLDMAN SACHS: Buy these 25 stocks expected to generate the greatest returns on their shareholders' investments over the next year as market-wide earnings remain low
Summary List Placement Despite soaring stock valuations since March, many companies' fundamentals have weakened as a...Summary List Placement Despite soaring stock valuations since March, many companies' fundamentals have weakened as a result of the economic slowdown from COVID-19. According to a recent note from Goldman Sachs, this bodes well for future gains across a variety of market sectors, as firms will see a rebound in profit growth as the economic recovery continues into next year. More specifically, companies will receive a boost to their return on equity (ROE), which can be used to assess the financial health and performance of management of a company. The indicator is known to be a favorite of legendary investor Warren Buffett. This aligns with the investment bank's forecast that downtrodden value stocks, which are strongly correlated with Goldman's ROE Growth basket of stocks, will see a boost from the recovery. "We continue to see opportunity for a near-term rotation towards Value. Potential tax reform represents one near-term catalyst. We previously found that Biden's proposed plan would have the largest negative earnings impact on popular growth sectors Info Tech, Communication Services, and Health Care," Goldman Sachs Chief US Equity Strategist David Kostin said in the note. Though he sees a Democratic tax plan as a risk, he said nixed tariffs and fiscal stimulus would likely offset a tax increase, at least at the outset, he said. Kostin added that a COVID-19 vaccine approval this year would likely drive a rotation away from growth stocks and into value. He further explained how the elections could boost value stocks and the ROE Growth basket by extension: "Similarly, the Biden campaign has proposed an increase in the capital gains tax. The Info Tech and Consumer Discretionary sectors have been the largest sources of capital gains within the US equity market during the last 3, 5, and 10 years." To get ahead of gains over the next 12 months amid the economic recovery, Kostin and his team updated their basket of 50 stocks poised to see ROE growth. Below, in no particular order, are the 25 with expected ROE growth above the basket's median of 18% over the next 12 months.SEE ALSO: A CIO who earned up to 90% per trade during the March crash offers his 2 best strategies for protecting against Trump-driven volatility — and says the president's diagnosis will be the catalyst for a further sell-off 1. NewsCorp Ticker: NWSA YTD Total Return: 1% Consensus ROE Growth: 36% Source: Goldman Sachs 2. Chipotle Mexican Grill Ticker: CMG YTD Total Return: 49% Consensus ROE Growth: 39% Source: Goldman Sachs 3. Tapestry Ticker: TPR YTD Total Return: 41 Consensus ROE Growth: 38% Source: Goldman Sachs 4. Ross Stores Ticker: ROST YTD Total Return: 20% Consensus ROE Growth: 33% Source: Goldman Sachs 5. Nike Ticker: NKE YTD Total Return: 25% Consensus ROE Growth: 31 Source: Goldman Sachs 6. Booking Holdings Ticker: BKNG YTD Total Return: 17% Consensus ROE Growth: 29% Source: Goldman Sachs 7. Ulta Beauty Ticker: ULTA YTD Total Return: 12% Consensus ROE Growth: 26% Source: Goldman Sachs 8. Cabot Oil & Gas Ticker: COG YTD Total Return: 1% Consensus ROE Growth: 42% Source: Goldman Sachs 9. Discover Financial Svc. Ticker: DFS YTD Total Return: 30% Consensus ROE Growth: 45% Source: Goldman Sachs 10. Wells Fargo & Co. Ticker: WFC YTD Total Return: 55% Consensus ROE Growth: 37% Source: Goldman Sachs 11. Everest Re Group Ticker: RE YTD Total Return: 27% Consensus ROE Growth: 32% Source: Goldman Sachs 12. Regions Financial Ticker: RF YTD Total Return: 30% Consensus ROE Growth: 27% Source: Goldman Sachs 13. American Express Ticker: AXP YTD Total Return: 18% Consensus ROE Growth: 24% Source: Goldman Sachs 14. Dow Inc. Ticker: DOW YTD Total Return: 10% Consensus ROE Growth: 39% Source: Goldman Sachs 15. Align Technology Ticker: ALGN YTD Total Return: 17% Consensus ROE Growth: 38% Source: Goldman Sachs 16. Illumina Ticker: ILMN YTD Total Return: 7% Consensus ROE Growth: 37% Source: Goldman Sachs 17. Dentsply Sirona Ticker: XRAY YTD Total Return: 22% Consensus ROE Growth: 37% Source: Goldman Sachs 18. IQVIA Holdings Ticker: IQV YTD Total Return: 2% Consensus ROE Growth: 25% Source: Goldman Sachs 19. Zimmer Biomet Holdings Ticker: ZBH YTD Total Return: 8% Consensus ROE Growth: 19% Source: Goldman Sachs 20. FedEx Ticker: FDX YTD Total Return: 69% Consensus ROE Growth: 21% Source: Goldman Sachs 21. Global Payments Ticker: GPN YTD Total Return: 2% Consensus ROE Growth: 29% Source: Goldman Sachs 22. Western Digital Ticker: WDC YTD Total Return: 41% Consensus ROE Growth: 28% Source: Goldman Sachs 23. Fidelity National Info Svc. Ticker: FIS YTD Total Return: 7% Consensus ROE Growth: 22% Source: Goldman Sachs 24. IPG Photonics Ticker: IPGP YTD Total Return: 17% Consensus ROE Growth: 21% Source: Goldman Sachs 25. Crown Castle Intl. Ticker: CCI YTD Total Return: 20% Consensus ROE Growth: 45% Source: Goldman Sachs
GOLDMAN SACHS: The stocks most loved by hedge funds have smashed the market this year. Here are 15 that those investors flooded into last quarter.
Goldman Sachs' Hedge Fund VIP list is tripling the returns of the broader market so far...Goldman Sachs' Hedge Fund VIP list is tripling the returns of the broader market so far in 2020, according to strategist Ben Snider. The list includes 15 stocks that are now among the ten biggest holdings for a large number of hedge funds that invest based on company fundamentals. The top of the list hasn't changed in two years, reflecting how much hedge funds are betting on mega-cap tech stocks like Amazon and Apple. Click here to sign up for our weekly newsletter Investing Insider. Visit Business Insider's homepage for more stories. Hedge funds love mega-cap tech, and their FANMAG fandom isn't going anywhere. But some new ideas are on the rise for the world's biggest investors. Delving into the holdings of leading funds, Goldman Sachs strategist Ben Snider writes that their top positions haven't changed much. In fact, the five most widely owned stocks have been the same for the last eight quarters, although their order has shifted at times. Those leaders are Amazon, Microsoft, Facebook, Alibaba, and Alphabet. But elsewhere, hedge funds are adjusting their positioning to add more industrial stocks and banks, and trim their holdings in tech and healthcare. The picture that emerges starts to look a little more like a bet on a recovering economy. "From an implementation standpoint, the Hedge Fund VIP list represents a tool for investors seeking to follow the smart money,'" Snider wrote in a note to clients. Goldman calls these widely-owned companies the "stocks that matter most." He notes that Goldman's list of the 50 most popular hedge fund long positions has returned 18% so far, compared to about 6% for the S&P 500. And being a new favorite comes with its own perks. "The Russell 3000 stocks with the largest increase in hedge fund popularity during 2Q have returned 22% in the last three months vs. 13% for the median stock," he wrote. Whether or not those stocks join the tech giants as world-conquering portfolio staples, it's worth watching as signs of a Wall Street consensus start to develop around them. For now, the biggest holdings of those funds are practically written in stone, as they haven't changed in a significant way in two years — practically an eternity on Wall Street. The 15 stocks that follow are the newest entrants in Snider's list of hedge fund favorites, meaning they broke into that list of 50 hedge fund favorites in the second quarter. The stocks are ranked from lowest to highest based on how many fundamentally driven hedge funds disclosed each stock as one of their top 10 holdings. Snider and his team picked only from funds that have more than 10 and fewer than 200 positions, which leaves a group of stocks those funds have a high degree of confidence in. Read more: ETF managers who target 2 of the market's hottest themes gave us inside looks into their investing approaches — including a gig economy strategy that is up 45% this year A JPMorgan equity chief sees stocks staying range-bound for another year, even if there's a vaccine breakthrough — but says investors can still get big returns in these 11 regions and sectors MORGAN STANLEY: Buy these 9 top-rated stocks right now for market-beating returns of 15%-plus over the next 3 months SEE ALSO: RBC says buy these 48 stocks spanning every industry that are poised to crush the market if Donald Trump wins reelection 15. Alexion Pharmaceuticals Ticker: ALXN Sector: Healthcare Market cap: $22.1 billion Year to date performance: -7.1% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 14. Copart Ticker: CPRT Sector: Industrials Market cap: $23.4 billion Year to date performance: +10.7% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 13. Danaher Ticker: DHR Sector: Information technology Market cap: $23.2 billion Year to date performance: +35.4% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 12. Advanced Micro Devices Ticker: AMD Sector: Information technology Market cap: $94.5 billion Year to date performance: +82.8% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 11. Horizon Therapeutics Ticker: HZNP Sector: Healthcare Market cap: $15.4 billion Year to date performance: +108.1% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 10. CrowdStrike Holdings Ticker: CRWD Sector: Information technology Market cap: $23.2 billion Year to date performance: +124.6% Funds with the stock as a top ten holding: 12 Source: Goldman Sachs 9. JPMorgan Chase Ticker: JPM Sector: Financials Market cap: $298.1 billion Year to date performance: -30.2% Funds with the stock as a top ten holding: 13 Source: Goldman Sachs 8. AbbVie Ticker: ABBV Sector: Healthcare Market cap: $168.3 billion Year to date performance: +7.1% Funds with the stock as a top ten holding: 13 Source: Goldman Sachs 7. Pinterest Ticker: PINS Sector: Communication services Market cap: 20.6% Year to date performance: +83.4% Funds with the stock as a top ten holding: 13 Source: Goldman Sachs 6. Caesars Entertainment Ticker: CZR Sector: Consumer discretionary Market cap: $7 billion Year to date performance: -25.1% Funds with the stock as a top ten holding: 13 Source: Goldman Sachs 5. Coupa Software Ticker: COUP Sector: Information technology Market cap: $20.1 billion Year to date performance: +105.8% Funds with the stock as a top ten holding: 13 Source: Goldman Sachs 4. Lowe's Ticker: LOW Sector: Consumer discretionary Market cap: $118.6 billion Year to date performance: +35.0% Funds with the stock as a top ten holding: 14 Source: Goldman Sachs 3. Qualcomm Ticker: QCOM Sector: Information technology Market cap: $124.3 billion Year to date performance: +28.1% Funds with the stock as a top ten holding: 15 Source: Goldman Sachs 2. Twitter Ticker: TWTR Sector: Communication services Market cap: $30.5 billion Year to date performance: +22.5% Funds with the stock as a top ten holding: 16 Source: Goldman Sachs 1. TransDigm Group Ticker: TDG Sector: Industrials Market cap: $26 billion Year to date performance: -14.4% Funds with the stock as a top ten holding: 18 Source: Goldman Sachs
Hello everyone! Welcome to this weekly roundup of Business Insider stories from executive editor Matt Turner....Hello everyone! Welcome to this weekly roundup of Business Insider stories from executive editor Matt Turner. Please subscribe to Business Insider here to get this newsletter in your inbox every Sunday. Hello! The financial-services industry is changing at a rapid clip, with fintechs addressing people's needs among the big winners in the wake of the coronavirus, as Dan DeFrancesco and Shannen Balogh reported this week. For example: Robinhood, which has seen massive growth as market volatility continues, is now valued at $8.3 billion after its most recent funding round in May. Meanwhile, other personal finance apps like Chime and Stash have also seen record sign-up numbers recently. With that in mind, Dan and Shannen polled 27 investors to discover the fintechs that are on the cusp of breaking out. While investors could pitch companies both inside and out of their portfolio, the caveat was that none could have surpassed a Series B raise. The response was impressive, with 60 fintechs nominated. Overall, investors seem more bullish on the future of startups catering to businesses, not consumers, as more than 63% of the selections were B2B. You can read both lists here: Investors say these 38 fintechs are the next generation of breakout B2B stars, following in the footsteps of Stripe and Plaid 22 fintechs that VCs and big investors say are on the brink of becoming household names Speaking of fintech investors, Megan Hernbroth profiled 25 young investors in the space, highlighting what drew them to fintech and what they think are the biggest opportunities. The investors also shared some tips on how to snag a role in their competitive field. You can read both stories here: These 25 investors are hunting for the next big fintech unicorn. Here's what founders should know before pitching them. The latest class of successful young fintech investors reveals how to land a job in the notoriously exclusive field Trump's most important 2016 donor is sitting out 2020 Dave Levinthal reports: Hedge fund billionaire Robert Mercer and his daughter Rebekah ranked among President Donald Trump's most influential backers in 2016. But they've all but abandoned the embattled president and aren't likely to help him in the home stretch for 2020, five people who know the media-averse Mercers tell Insider. "They're 100, 100, 100% out," an associate of Rebekah Mercer said. You can read that story in full here: Trump's most important 2016 donor is sitting out 2020 In other politics news: Tom LoBianco had the inside story on Jared Kushner's call to the CEOs of AT&T, Verizon, & T-Mobile after the Trump campaign was blocked from sending text messages to people who hadn't signed up for them. Dave reported that Republican Party officials hid COVID-19 mask purchases by labeling them "building maintenance" in federal disclosures. And Elvina Nawaguna reported that Presidential inaugurations are prime time for DC schmoozing. But the coronavirus pandemic might mean no fancy balls, parades or big swampy parties come January 2021. The transformation of the real estate business We've written at length in recent months about the future of the office, as the coronavirus pandemic forces employers to rethink their needs and landlords to reimagine their model. This week: Dan Geiger reported that 20% of WeWork's New York space is sitting empty. He took a look at key vacancies the city's biggest office tenant is trying to fill. Alex Nicoll and Rebecca Ungarino reported that Wells Fargo is ditching a 750-person WeWork space, while Citi inked a deal with the flex-office giant far from a big city. They took a look at how financial firms are retooling their real estate. Reed Alexander reported that while Wall Street is starting to return to the office, not everyone is heading back. He took a look at which finance jobs are the most likely to remain virtual. In related news, the rapid shift to ecommerce that's been accelerated by COVID 19 is putting severe pressure on malls and placing fresh emphasis on warehouse space. Dan reported that Neiman Marcus' shocking exit from glitzy Hudson Yards strikes a huge blow to the $25 billion project. The departure could unravel one of the most expensive mega-malls in US history. Meanwhile, the $98 billion cold-storage sector is at a tipping point, per Dan and Alex. Investors are piling in as online grocery deliveries surge. And logistics startup Bond has teamed up with SoftBank-backed REEF Technology to bring nano-warehouses to parking lots across the US. Alex reported on how they're building the distribution hubs of the future. Separately, I want to highlight a couple of things before I go: We're seeking nominations for the 2020 edition of our annual list of Rising Stars of Wall Street. Here's how to apply. We're speaking with YouTube and Instagram influencers with millions of followers about how they're adapting their businesses during the pandemic and earning 6-figure incomes. Sign up for the digital live event on August 5 here. Below are headlines on some of the stories you might have missed from the past week. — Matt Inside the rise of Ram Sundaram, the leader of a secretive Goldman Sachs desk that's minting billions by designing some of the bank's most imaginative — and controversial — trades Top management-consulting salaries, revealed: How much Bain, BCG, and McKinsey consultants make, from entry level through partner roles Bernstein says buy these 13 dividend-rich stocks built to capitalize on a trend not seen in 65 years 19 media startups that top VCs say are poised to take off in 2020, as the pandemic reshapes the industry Insiders at Complex Networks said the company was built on Black culture but that the sales team 'whitewashed' advertising deals for brands, replacing Black people with white people in pitch decks In March, Trump announced Google would build a coronavirus testing tool. Some employees working on it describe exhausting conditions, stress, and tears as they work around-the-clock to pull it off. Leaked documents reveal Exxon changed its employee-ranking system amid the coronavirus pandemic, putting more workers at risk of getting cut POWER LIST: Here are the 18 most outstanding women transforming the sneaker industry today, from designers to influencers Join the conversation about this story » NOW WATCH: Swayze Valentine is the only female treating fighters' cuts and bruises inside the UFC octagon