Josh Frydenberg takes reins as Goldman Sachs ANZ chair

The US investment bank will be counting on Australia’s former federal treasurer to help revive dealmaking activity.

Former federal treasurer Josh Frydenberg at the Goldman Sachs offices in Melbourne. Picture: NCA NewsWire / David Crosling

Goldman Sachs has appointed former Australian treasurer Josh Frydenberg as chair of its Australian and New Zealand operations, sidelining his political career as the US investment bank seeks to revive an anaemic deal-making environment.

Mr Frydenberg, who served as treasurer and deputy leader of the Liberal Party from 2018 to 2022, will retain his role as client adviser for the Asia Pacific.

He became an adviser at the US firm in July last year after losing his blue-ribbon Melbourne seat of Kooyong at the federal election in May. 

“In his role, Josh will focus on further deepening and strengthening client coverage across the Australia and New Zealand region,” Goldman Sachs’ local CEO Simon Rothery said.

“He will continue to offer advice on economic and geopolitical issues as the firm’s senior regional adviser for Asia Pacific.” 

Mr Frydenberg assumes the role of chairman following the retirement of Christian Johnston, who served as Goldman Sachs‘ executive chairman in Australia since 2020 and retired in March this year.

“Josh will work closely with Simon Rothery, Nick Sims and Zac Fletcher to further enhance our One Goldman Sachs client focus and our positioning as a trusted adviser to clients by delivering the entire firm,” the firm said. Mr Sims and Mr Fletcher are co-heads of investment banking for Australia and New Zealand.

Josh Frydenberg is taking the role of chairman of Goldman Sachs’ Australia and New Zealand operations. now at Goldman Sachs. Picture: NCA NewsWire / David Crosling

His appointment at Goldman means Mr Frydenberg will not seek to win back his old seat of Kooyong at the next federal election, avoiding a second showdown with Teal independent Monique Ryan, who ended his parliamentary career when she won the seat in 2022.

The appointment comes at a difficult time for Goldman Sachs as it faces internal instability and a merger and acquisitions landscape where activity has plummeted since the end of the era of ultra-cheap money.

Australian M&A activity in the first nine months of 2023 is nearing $US81.3bn, 27 per cent lower than the previous year, according to Refinitiv data. That is fraction of the $US311bn in deals churned over the same period in 2021 in the wake of the Covid-19 pandemic.

In an effort to cut costs following the slowdown in activity and losses at its consumer banking business, Goldman culled over 6.5 per cent of its global workforce earlier this year, and is looking into a further round of lay-offs in October.

Before being elected to parliament in 2010, Mr Frydenberg worked as a director at Deutsche Bank.

Globally, Goldman has had several high-profile political figures join as advisers in the past, including former Italian prime minister Mario Monte.

Other Australian politicians have joined investment banks and private equity firms. Paul Keating was chairman of Lazard Australia, while Malcolm Turnbull, once the local managing director of Goldman Sachs, was appointed a global senior adviser to KKR in 2019.

As treasurer from 2018 to 2022, Mr Frydenberg guided the country through much of the pandemic, including the introduction of the JobKeeper wage subsidy – praised for preserving the economy but criticised by some as providing support for profitable firms.

Goldman Sachs has also been dealing with constant media headlines criticising the leadership of its chief executive David Solomon, including an article last month in New York Magazine headlined “Is David Solomon too big a jerk to run Goldman Sachs?”

The articles have highlighted internal backlash against Mr Solomon – who became CEO in 2018 – his reportedly brusque leadership style, the bank’s falling profits and its ill-fated foray into retail banking.

In a recent interview with CNBC, Mr Solomon responded saying the “caricature” the media has painted of him “is not one that I recognise”.

He also said he expected to see “a meaningful increase in activity” in the next few months even if up from “anaemic” levels.

“I see a real improvement, I’m quite optimistic about what I’m seeing,” he said. “I think we can very quickly get back to what I call a more normalised level of activity in the capital markets and that’s obviously very good for Goldman Sachs.”

Australian investment banking fees at Goldman Sachs are down 58 per cent during the period to $US55m, Refinitiv data shows. The firm ranks eighth in Refinitiv’s year-to-date league tables for Australian M&A, behind Bank of America, JPMorgan and Gresham.

Originally published as Josh Frydenberg takes reins as Goldman Sachs ANZ chair