Increasing turbulence in US equity markets yesterday added to the pressure on partners in Goldman Sachs, the US investment bank, as they debated a proposal to launch the firm on the stock market. In morning trading on Wall Street, the Dow Jones Industrial Average, the key US stock market index, fell 117.08 points to 8,694.69, largely on concerns about the impact of Asia's economic woes on US corporate earnings. It brought the market's decline over the week to more than 3 per cent. Analysts said Goldman's 190 partners, meeting at a conference centre in a New York suburb, would have to consider the risk that if they decided on a flotation, it could be threatened by the continuation of unsettled markets.
It emerged late last night that it was highly unlikely any decision on flotation would be taken before Sunday. "Were the market downturn to continue, it would cause many IPOs (initial public offering) to be postponed, including this one," said Mr Raphael Soifer, financial services analyst at Brown Brothers Harriman, the Wall Street firm.
On Thursday, before the meeting, one Goldman partner said that if the firm decided on a flotation but was forced to pull it, it would be "highly embarrassing" for Goldman.
If approved, flotation would probably take place in autumn and would likely represent between 20 and 30 per cent of the firm. It has a book value of $6.3 billion (£4 billion). Estimates of the whole firm's market value range from $20 billion to $30 billion.
Among the beneficiaries of any flotation would be Mr Peter Sutherland, managing director of Goldman Sachs International. He is one of the firms most senior partners, having only joined the firm in 1995. A flotation would lead to a multi-million dollar payout for Mr Sutherland and the other partners.
Goldman partners said before the meeting their greatest concern was that the vote in favour of a flotation would be narrowly carried, leaving the firm - Wall Street's last big partnership - divided.
There are also concerns that Wall Street headhunters and rival investment banks will exploit the uncertainty over the firm's future. Rival banks said they were, for the first time, receiving the resumes of Goldman executives disgruntled about the prospect of the partnership posts - to which they aspire - being abolished. Also on the downside, reportedly causing anxiety to some senior partners at Goldman, is that even a partial flotation would change the culture and destroy the bank's distinctive ethos.
