Jim Esposito is all set to become the new global co-head of trading at Goldman Sachs. This should only come as a surprise to those who weren't watching: Goldman insiders have been predicting Esposito's ascension to the securities top spot for over two years.
In a sense, Esposito had a head start: his father was CFO of Chase Manhattan in the 1980s and his is a banking family. Brother Michael is chairman of Goldman's financial institutions group (FIG) business. Brother John is global co-head of FIG at Morgan Stanley. If Jim's banking career got stuck at VP level, it wouldn't have been seemly.
There's more to Espo than family though. He's extremely good at getting on with the people who matter. And he has a knack for preempting the next big thing. Esposito is, "slippery," says one senior Goldman insider who knows him. He's an, "excellent politician."
Espo is very friendly with David Solomon, Goldman's soon to be CEO. Business Insider reports that he's part of a small group of colleagues considered to be in Solomon's inner circle. 'Of all the top sales and trading leaders, Esposito may be the one with whom Solomon is most comfortable,' BI suggested in July. This clearly helped Espo get ahead, but then so too did his closeness with departing CEO Lloyd Blankfein. - When he was promoted to head of strategy in the securities division in 2016 to help solve the firm's weakness in fixed income, Esposito was widely seen as Blankfein's man as well.
If Esposito is an operator, this isn't his only strength. He's also prescient when it comes to positioning himself for the future. In 2011, he moved from New York to London ahead of expected growth in European capital markets which he forecast would enable Goldman to pick up more European clients. Although European revenues still only accounted for 27% of the total at Goldman in the three months to June 2018, the London move helped position Esposito as a person to be relied upon in Europe.
He can be ruthless: as of head of strategy, Esposito was believed to have orchestrated the rush of senior exits from Goldman Sachs' fixed income sales business in 2016 as he sought to shift the culture in fixed income sales towards more of an equities-like agency-based approach with a focus on the relationship rather than the individual trade. In a measure of Esposito's influence, much of Harvey Schwartz' strategy presentation in September last year seems to have come from his client-focused playbook.
With Esposito all but confirmed as the securities division co-head alongside Ashok Varadhan, the Wall Street Journal says it's not clear what will happen to the four other lieutenants in waiting (Justin Gmelich, Paul Russo, Michael Daffey and Julian Salisbury) who were also hoping for that role. If they stay with the firm, they may want to take a leaf from Eposito's playbook and build bridges with those who matter. In the meantime, Esposito will have plenty of opportunity to strengthen his own position by influencing partner promotions at the end of this year. If all goes well, in ten years time he could yet be the man to replace David Solomon. You might say he was born for it.
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