Goldman Sachs’s Schwartz Leaving as Asia-Pacific Chairman

Updated on
  • Schwartz to become senior adviser at the New York-based firm
  • Was the firm’s first regional chairman to be based in Beijing

Mark Schwartz, Goldman Sachs Group Inc.’s Asia-Pacific chairman, will step down at year-end and be an adviser to the firm.

Schwartz, 62, who has worked at the firm for 27 years and is based in Beijing, will become a senior director, the New York-based bank said Monday in a memo to staff. Ken Hitchner will remain as president of Asia Pacific ex-Japan and Masa Mochida will continue to serve as president of Goldman Sachs Japan, according to the memo.

“Throughout most of his tenure at Goldman Sachs, Mark played an instrumental role in shaping our strategy in Asia Pacific,” Chief Executive Officer Lloyd Blankfein and President Gary Cohn said in the memo.

Schwartz was the first regional chairman Goldman Sachs based in China’s capital. Since he took the post in 2012, he lobbied Chinese regulators to speed up capital-market reforms, as his firm sought to manage more local money and expand its mainland product offerings. Part of Schwartz’s long-term goals was to secure permission to take full ownership of the investment-banking venture his firm formed with Beijing Gao Hua Securities Co. in 2004, according to people familiar with the matter.

China limits foreign ownership of mainland securities firms at 49 percent. The cap was raised from 33 percent in May 2012, though Goldman Sachs’s stake in its China venture remains at that level. Gao Hua Chairman Fang Fenglei agreed to give Goldman Sachs management control when the partnership was formed, the first time such control was granted to a Wall Street firm.

Schwartz will return to New York after retiring from his current role, said Edward Naylor, a Hong Kong-based spokesman for Goldman Sachs. The Wall Street Journal reported Schwartz’s planned exit earlier Monday.

His departure comes at a time when the bank is facing scrutiny for past Asia deals, and heightened competition for new business. The company is under investigation for its role in underwriting $6 billion of bond sales for 1Malaysia Development Bhd., the government fund at the center of several international probes into suspected corruption and money laundering. Goldman Sachs’s ranking for Asia ex-Japan equity offerings plummeted from second in 2015 to 12th this year, its worst showing since at least 2000, according to data compiled by Bloomberg. Including equity-linked deals, Goldman ranks fifth in the region this year, the data show.

Job Cuts

The company is reducing investment-banking jobs across Asia outside Japan, though the depth of the cuts has lessened in recent weeks. Goldman Sachs is trimming about 15 percent of such positions in the region, fewer than the 25 percent, or 75 jobs, initially considered last month, a person with knowledge of the matter said.

Schwartz joined Goldman Sachs in 1979 and rose through the ranks, founding the high-yield department in 1985, becoming partner in 1988 and running debt capital markets for a number of years in the 1990s, the memo said. In 1997, he moved to Asia to take on a series of management roles before leaving the firm in 2001, the memo said. He rejoined in 2012 in his current position and served on the management committee.

Schwartz, also a vice chairman at Goldman Sachs, received $22 million in total pay, including a $4 million incentive, for 2015.

Prior to rejoining Goldman, Schwartz had been chairman of investment firm MissionPoint Capital Partners since 2006. He was a senior adviser to Soros Fund Management LLC from 2002 and then president and CEO from 2003 to 2004.

Goldman Sachs has also lost other senior leaders in the region. The head of Southeast Asia, Michael Smith, is planning to leave after 10 years at the firm, people with knowledge of the matter said last month.

(Updates with year-to-date equities ranking in paragraph eight.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE