Goldman Sachs is said to be looking into restructuring its European distressed loan trading operation with an eye toward creating a separate proprietary desk. Buysiders and traders suggest the firm is looking to mold its existing proprietary efforts into more of a buyside operation. The details of the effort could not be obtained. Simon Mansfield, managing director, head of European distressed debt trading at Goldman, and a spokeswoman did not return calls.
Many European loan desks have a large proprietary component to help aid liquidity in the distressed loan market. But having a large proprietary operation often has a stigma attached to it because of the potential for competition with clients and other abuses such as front-running, said traders. Even if a desk works hard to avoid these conflicts the perception that they could possibly exist creates a sticky situation for firms, noted one dealer.