Last year was not a good year for Goldman Sachs’ commodities sales and trading business. The bank itself said revenues there were “significantly lower” than in 2022 and two key people left. – Ed Emerson, the head of commodities, left in December and is probably now hanging out in either Palm Beach, Tribeca or the Bahamas. Head of commodities research Jeff Currie left aged 56 last August and joined Carlyle Group this February.
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Both Emerson and Currie had a good run, with Goldman commodities bonuses allegedly reaching $30m in good years during their tenure.
But in 2023, things seem to have dwindled.
Figures released in Goldman’s 10K form for full year 2023 show that gains from commodities market making at Goldman fell 38% last year to $1.9bn, and that full year gains were $20m below nine month gains, implying a loss in the final quarter. Goldman’s commodities gains in 2023 were their lowest since 2019, when the firm registered only $355m in profit.
Goldman notes that the figures should not be taken literally, as “gains or losses in one product type frequently offset gains or losses in other product types.”
Goldman’s apparently dwindling commodities fortunes come after Citadel’s 220 person commodities team made $4bn in profits last year, 50% below the level of 2022. The more difficult period in commodities might explain recent movement in the sector: Nick O’Kane, the former head of the commodities business at Macquarie, left for Mercuria in February, for example.
In the wake of Emerson’s exit in December, Goldman promoted Nitin Jindal as its co-head of global commodities, based in America, and Xiao Qin as the other head of its commodities business, based in Singapore. With hedge funds sniffing around for new commodities talent, the two men need to stabilize the team and prove that it can thrive without its two big names.
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