Another Reason Why '10 Was a Year to Forget for Goldman Sachs
D. Cimilluca; February 24, 2011

It's (semi)official: in '10, Goldman Sachs Group forfeited the M&A crown.

The Wall Street titan, which has long vexed rivals using its uncanny power to land on almost every deal that means something, has been knocked to No. 2 in Thomson Reuters’ closely watched rating of deal agents for 2010. The firm already had suffered the ignominy of a second-place conclusion based on the other primary scorekeeper, Dealogic.

Morgan Stanley is now No. 1 within global introduced deals for 2010 based on both Thomson and Dealogic, the first time since 1995 the company has attained that recognition.

It is the first-time in the last ten years that Goldman didn’t finish No. 1 in at least one of the rankings.

As fulfilling as the end result will be for Morgan Stanley, it is likely to leave a bitter flavor in Goldman’s mouth and serve as a reminder of how forgettable 2010 was for that company (it was the year of “Fabulous” Fabrice Tourre after all). For ages, Goldman dominated Morgan Stanley in the uber-competitive–and profitable–world of M&A, completing 1st according to both Thomson and Dealogic every year from 2001 to 2007. (In 2008, Goldman lost the very best Dealogic spot to J.P. Morgan, and hasn’t been undisputed champ since then.) A reduced competitive standing in M&A is going to be all the more unwanted at Goldman at a time once the firm’s earnings power in other areas has been trimmed in the wake of the financial crisis.

Seems like 2 offers account mainly for the recent swing: Coca-Cola’s $13 billion majority purchase of its largest bottler (Goldman lost credit) and a $16 billion deal including American International Group and also the Federal Reserve Bank of Ny (Morgan Stanley gained credit).

Certainly, one can be pardoned for inquiring why almost two months following the end of the year the results are still susceptible to change, but such are the vagaries of deal rankings, as transactions get pulled, bankers’ roles on deals gets debated, along with the very definition of an M&A deal. Which indicates the chance that Goldman will once more vault forward can't be discounted. Equally worth keeping in mind is the unique possibility that like a great athlete, Goldman will win whenever it matters most, i.e. when deals come back in total force, as they have lately demonstrated signs of doing.

Indeed, based on Dealogic a minimum of, year-to-date Goldman has returned to No. 1.