Goldman Sachs yesterday announced that it will expand its UK footprint by opening a new office in Birmingham, adding to a number of financial and professional services firms looking for top talent outside of London.
The US investment bank expects its new offices in the West Midlands to open in the third quarter of 2021, first building out its technology engineering division through a mix of new hires and employee transfers. In recent years, Goldman has expanded its other technology hubs in Europe, including in Warsaw, Poland and Stockholm, Sweden.
“Establishing a new office in Birmingham will diversify our UK footprint and give us access to a broad and deep talent pool in the local area,” Richard Gnodde, chief executive officer for Goldman Sachs International, said in a statement.
“We see tremendous opportunity to enhance our UK presence and continue delivering for our global clients,” he added.
Goldman’s plans to open its largest UK office outside of London follows in the footsteps of other big names. Deutsche Bank employs roughly 1000 people in Birmingham; HSBC previously opened its domestic headquarters in the city in 2018, with 2500 employees before the pandemic hit.
Neil Rami, the chief executive of the West Midlands Growth Company, the investment agency that helped Goldman, said that the region “is successfully recasting typically London-centric banking structures, offering a premium but far more cost-effective base for innovative businesses with a growth mindset.”
The West Midlands recently launched Supertech, the UK’s first and only dedicated professional services-tech accelerator, aiming to promote the region’s local entrepreneurial community and connect investors with start-ups involved in financial technology (fintech), legaltech, proptech and insurtech.
Over the past decade, London has attracted the vast majority (62.8%) of foreign direct investment (FDI) projects into UK financial services, according to greenfield investment monitor fDi Markets. While other UK cities still pale in comparison, Edinburgh emerges as the leader outside of London, with 44 projects in the same 10-year period, followed by Belfast (42), Manchester (35) and Birmingham (27).
Following the UK’s official departure from the EU on December 31, 2020, the UK subsidiaries of multinational financial institutions lost the “passporting rights” that had previously allowed them to sell their services into the EU.
While the UK has adopted the same financial services legislation as the EU to date, it may diverge from this in future, leading many financial institutions to shift teams to the continent.
Goldman has opened branches in several EU jurisdictions to enable its teams across investment banking, global markets and wealth management to do business in the EU. In January, Goldman doubled its headcount at its office in Madrid to 60 employees.
According to Goldman’s 2020 annual report, its German bank subsidiary GSBE acts as its main EU subsidiary, and has “assumed certain functions that can no longer be efficiently and effectively performed by [its] UK operating subsidiaries”.