Goldman Sachs Group Inc. is seeking potential recruits from peer-to-peer lenders including LendingClub Corp. and Prosper Marketplace Inc. to bulk up its new online-loan business, known as “Mosaic,” people contacted by the investment bank said.
The firm reached out to workers in New York, where it’s based, and in San Francisco, the people said, asking not to be identified because the correspondence is private. Dozens of employees were targeted with expertise in areas including marketing, credit and engineering, according to one of the people.
Goldman Sachs is looking to join startups that use technology to extend consumer credit more efficiently and at a cheaper rate, a departure for a company that’s historically steered clear of retail businesses. Unlike LendingClub, which connects investors with borrowers looking for personal loans online, Goldman Sachs will be funding loans through its deposit- taking subsidiary, Goldman Sachs Bank USA.
The investment bank’s recruiting push among peer-to-peer lenders comes 10 months after Goldman Sachs helped LendingClub go public. The $1 billion IPO in December was followed by a surge that lifted LendingClub’s market value above $10 billion. Since then, that figure tumbled to $5.3 billion and Goldman Sachs announced its own online consumer-lending business.
‘Diverse Experiences’
“We have recruited talent from a wide array of industries to build a team with diverse experiences,” Andrew Williams, a spokesman for Goldman Sachs, said in a statement.
Goldman Sachs has also hired new employees for the effort from Citigroup Inc., Barclays Plc, American Express Co. and Discover Financial Services, according to employees’ LinkedIn profiles.
Sarah Cain, a spokeswoman at San Francisco-based Prosper, declined to comment. LendingClub’s Rebekah Nicodemus didn’t return an e-mail requesting comment.
ROE Impact
Consumer lending’s higher returns may help Goldman Sachs in its struggle to boost return on equity, a gauge of profitability that dropped to 7 percent in the third quarter from 11.8 percent a year earlier. The bank is seeking to move into more digital niches of the financial-services industry, such as online lending and initiatives with startups.
“We’re a technology firm — we’re a platform,” Chief Executive Officer Lloyd C. Blankfein said in an interview on Bloomberg TV in June.
While online marketplace lenders once set out to disrupt traditional banking, many of them are now cooperating with Wall Street by teaming with banks, selling their loans to large institutional investors or helping to bundle them into securitized bonds. Blackstone Group LP, the world’s biggest manager of alternative assets, has also announced plans to make loans to individuals and small businesses.
