Home > Finance and Economics > Two Timin’ Goldman Sachs

Two Timin’ Goldman Sachs

The Times ran an interesting piece the other day about the private equity boom of the last decade and the investment bankers that financed them.

Sometimes the PE guys and the bankers were one and the same:

Goldman Sachs had representatives sitting on both sides of the table: the firm was one of the large private equity investors but had also acted as investment banker and lender and would, ultimately, nab a big piece of TXU’s huge commodity hedging business. The bank’s representatives sat quietly during the talks, according to participants.

Goldman was on so many sides of the TXU deal that its representatives made other lenders nervous, according to participants, because it was hard to ascertain whose interests the bank was serving.

Surely there’s nothing illegal here, but how ethical can this be?  I would never try to stop anyone in their ability to make as much money as possible so long as they’re not breaking the law or harming anyone.  And I don’t agree with the latest populist aversion to bankers’ salaries and bonuses and such.  But I guess there’s a reason why Goldman is called the vampire squid.

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