June 6, 2023

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Goldman Is ‘Doubling Down’ on Technology Investing, Dees Says

(Bloomberg) — Goldman Sachs Group Inc. investment banking co-head Dan Dees said the firm’s dealmakers are looking for opportunities in all areas of technology as companies emerge from the pandemic era.

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Artificial intelligence, augmented reality, quantum computing and synthetic biology are among areas for investment, Dees said in an interview with Bloomberg Television’s Emily Chang to be aired Wednesday. He also pointed to “places of overlap” between tech and traditional industries such as finance, real estate and health care.

“We’re doubling down on everything in technology right now,” Dees said. “It’s such an exciting time.”

Startups are growing more quickly than ever and demanding attention from investment bankers earlier in their existence, he said. Some fledgling firms become “important companies to us and to our franchise” within two or three years of their founding.

“We realized these companies were starting small and getting big very, very fast — and we had to go earlier and earlier into their life cycle to start building relationships,” Dees said. Goldman is “trying to treat technology the way the economy treats technology, which is having it be pervasive in all of our groups and infiltrate every group.”

Fintech has potential to disrupt traditional finance, and New York-based Goldman is looking for ways for automation to handle “the menial stuff” and let bankers focus on “the meaningful stuff.” To build relationships, advise clients and structure deals, the bank relies on its workforce, he said.

Investment banking is “‘human-heavy stuff and we need more and more people to do it, given the current pace of business,” Dees said.

Direct Listings

Dees said it’s “fantastic” that some firms are turning to non-traditional methods to access public markets. Direct listings and special purpose acquisition companies are part of a “broad slate” of tools that Goldman can offer to clients, as well as a conventional initial public offering, which he said is still the most popular avenue.

“More companies are still choosing the traditional path of the traditional IPO,” Dees said. “I don’t believe the traditional path is broken.”

With the lifting of more and more pandemic restrictions, Dees said he’s looking for investment-banking activity to remain strong. He expects an accelerated pace of companies being formed and that firms will be looking for deals to get bigger or shed non-core operations.

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