US investment bank plans to employ hundreds of people at new technology hub that will be its largest UK office outside London.
Goldman Sachs has 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 to regional cities to secure top talent.
The US investment bank expects its new offices to open in the third quarter of this year, first building out its engineering division through a mix of new hires and employee transfers. In recent years, Goldman Sachs has expanded into 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 of 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 London in the West Midlands follows in the footsteps of other big names. Deutsche Bank employs roughly 1000 people in Birmingham, while HSBC opened its domestic headquarters in the city back in 2018, where it had around 2500 employees pre-pandemic.
Neil Rami, chief executive of the West Midlands Growth Company, the investment agency that helped Goldman Sachs, 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”.
Fintech focus
The West Midlands recently launched Supertech, the UK’s first and only dedicated professional services-tech accelerator, aiming to promote Birmingham and the West Midlands region’s local entrepreneurial community and connect investors with start-ups involved in 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 regional 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 subsidiaries of multinational financial institutions effectively lost their passporting rights into the bloc.
While the UK has so far adopted the same financial services legislation as the EU, it may diverge from this in future, leading many financial institutions to shift teams to the continent.
Goldman Sachs has opened branches in a number of EU jurisdictions to enable its teams across investment banking, global markets and wealth management to do business in the EU. In January, the investment bank doubled its headcount at its office in Madrid, Spain to 60 employees.
Goldman Sachs’s 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,” according to its 2020 annual report.
