One of the lesser-known casualties of the financial crisis was the disappearance of Goldman Sachs's partner dinners — the lavish black-tie galas that drew all the members of Goldman's elite partnership together for a night of revelry. After the crisis, when tensions on Main Street ran high and the bank became a target of the masses, the dinners were canceled, as was the firm's annual holiday party.
But for the first time since 2006, the Goldman partner dinner has returned, in a signal that Wall Street's most powerful investment bank is ready to shed its crisis-era cloak of modesty and celebrate again.
Daily Intelligencer has learned that in early February, several weeks after Goldman reported a $2.9 billion quarterly profit that one analyst said reminded him of the "old days," the firm's top executives gathered for a gala at Pier 36, an event space on Manhattan's Lower East Side. The party brought together Goldman's roughly 450 partners from around the world, as well as their spouses and invited guests, for a gourmet dinner followed by a jazz performance.
"The dinner was a nice way to end a week full of meetings and to welcome the 70 new partners, especially since that whole group from around the world doesn't get together often," said David Wells, a Goldman spokesman.
This year's gala was the culmination of a partner's off-site, a type of corporate retreat that is periodically held to discuss strategy and issues facing the firm. Goldman held an off-site for partners in 2010, but there was no gala afterwards, perhaps because wealthy executives didn't want to be seen partying while the rest of the economy was working its way out of a recession.
"It simply wasn’t appropriate," said one former Goldman partner, adding that outsiders "might have found it offensive to have a lavish party while lots of people were having their houses repossessed."
This year, Goldman's partners gathered to discuss firm business and hear advice from financial leaders like venture capitalist Marc Andreessen. Then, after Friday's session, they put on their tuxedos and ballgowns and headed downtown to celebrate. The festivities were captured on-camera by at least one person in attendance — Instagram user Shannon Kelly, who accompanied her photos of the gala with captions like "The Goldman Sachs Ball last night! It was like attending the Golden Globes of investment banking!"
Becoming a partner at Goldman is seen as the pinnacle of a career on Wall Street. Goldman partners, who are picked through a process called "cross-ruffing," get to take part in a special bonus pool, as well as extra perks like getting their personal taxes prepared by the firm's accountants and getting dinner reservations at world-class restaurants. Goldman named 70 partners last November — the smallest class since it went public in 1999.
Partner dinners are meant as morale-building events, as well as an opportunity to toast the newly arrived. "The intent behind it is to reinforce the concept of partnership," the former Goldman partner said. "It makes people feel very special."
Years ago, newly named partners were congratulated at events held in a private room at the 21 Club. But rarely does the firm's entire partnership — a group that includes CEO Lloyd Blankfein and COO Gary Cohn — come together in one room. In 2004, Goldman held a partner dinner at the MoMA, where a string ensemble played for attendees. In 2006, Harry Connick Jr. was hired to serenade Goldman partners at the Brooklyn Botanic Garden. And this year, the firm picked Pier 36, a space that one Yelp reviewer described as "a giant warehouse"; a launch event for BlackBerry 10 had been held there just two days before.
Unlike the days in which Goldman was privately held, partners no longer share the bank's profits. But they still have a big financial stake in the company's success. As of last year, Goldman's partners owned 12.7 percent of the firm's shares. And, as this year's gala shows, there are still nonfinancial perks to partnership.
It's unclear whether a firmwide holiday party will also be reinstated this year. But make no mistake: Now that Goldman's top executives are letting loose again, the financial crisis — at least for Goldman — is officially over.