NEW YORK, AUG. 14 -- Goldman, Sachs & Co., one of Wall Street's most successful investment banking firms, announced today that executives Robert E. Rubin and Stephen Friedman will jointly take over leadership of the firm at the end of November.
The planned transition hardly came as a surprise, because Rubin and Friedman have been groomed for the top job for three years in their current posts as co-vice chairmen of Goldman's management committee. They will become senior partners and co-chairmen of that committee, together replacing John L. Weinberg, the senior partner who is retiring at age 65 after a career built upon handling important client relationships, including General Electric Co.
The pair will try to build on Goldman's existing businesses, particularly in foreign markets, and plan no major changes in strategy, they said in a joint telephone interview.
"This is not a change in regime," Friedman, 52, said. "The two of us and John Weinberg have worked exceedingly closely for years."
Goldman watchers predicted that the two would seek to speed up overseas expansion and enlarge the firm's domestic money-management business.
Although Goldman's prestigious image was tainted during the 1980s when two of its employees were implicated in the Wall Street insider trading scandal, the firm generally emerged with its reputation intact and is considered to be moving in the right direction.
"Of the large firms, it's the best managed," said Perrin H. Long, a securities industry analyst for Lipper Analytical Securities Corp.
The new leadership team represents a mix of experience in trading and investment banking. Rubin, 51, previously was head of Goldman's trading and arbitrage division, while Friedman once headed the mergers and acquisitions department.
Rubin is a prominent supporter in business circles of the Democratic Party and is chairman of the New York City Host Committee for the 1992 Democratic Convention.
The decision to divide the chief executive's responsibilities sets a precedent at Goldman. Weinberg and John C. Whitehead shared the top job as co-chairmen from 1976 until 1984, when Whitehead resigned shortly before becoming U.S. deputy secretary of state.
Rubin said that Goldman expects to benefit from its "well-established" position in Western Europe -- in stock offerings, real estate and mergers -- as the 12-nation European Community erects a single, internal market scheduled to be completed by the end of 1992.
Goldman also sees opportunities for growth in the Far East, such as in Singapore, Taiwan, Hong Kong and Korea, and in Latin America, Rubin and Friedman said.
Analyst Long said that the new leadership may come under pressure to boost pretax income by putting "greater emphasis" on operating mutual funds and money market funds, which provide a more stable stream of earnings than the more cyclical investment banking business.
During the takeover frenzy of the 1980s, Goldman sacrificed some of the most lucrative available business because of its policy of refusing to represent corporate raiders and others launching hostile takeover bids. But the firm represented many corporate takeover targets, and in today's more sedate climate, the firm's strategy of cultivating close, long-term relationships with blue-chip corporate clients is paying off.
In the first half of this year, Goldman was No. 1 on Wall Street in U.S. merger and acquisition business, with $29.6 billion worth of deals, according to IDD Information Services Inc., a New York-based financial information firm. Goldman placed second in U.S. corporate finance work (stock and bond offerings) in the six-month period, with $21.4 billion of business, IDD said.