Three managers have announced their departure from Goldman Sachs to start a company called Entrust Capital. Entrust is a brand new fund on Wall Street that begins with great promise, but the sting for Goldman is real. Goldman Sachs was once a place people never left, and now Goldman Sachs is a company that people are using as a springboard to further their own cause. Goldman must deal with the new competition, and new investors must decide if Entrust Capital a good place to be.
How Did Entrust Capital Start?
Entrust Capital has started with 125 clients and $750 million in assets. This kind of capitalization will leave the company ready to hit the ground running. This initial fund is actually small by standards on Wall Street, but it is a substantial fund considering it has just begun. The initial 125 clients will likely grow by the end of the year, and 2016 will be a perfect time for the fund to grow to its full capitalization. The capitalization of the fund could reach into the billions quickly, and the fund could remain at that level for quite some time before it starts another fund.
How Far Can Entrust Go?
Entrust is telling everyone on Wall Street that they were getting internal returns over 30% while they worked at Goldman, and each man said he made around $15 million in commissions last year alone. This kind of performance is amazing, and each man appears to be ready to run a fund that could easily outgrow the funds that are managed by Goldman Sachs. The plan is to grow the first fund as much as possible before the company begins to expand.
The management of the company is going to happen among these three men, Michael Horowitz, Mark Fife and Gregg Hymowitz, and they are going to make all the decisions for themselves. The tight management circle at Entrust Capital is going to change the way that the investment business works. Some of the largest investment firms are too large to make decisions quickly, but Entrust Capital is going to narrow its focus to make sure that all decisions are made in a wise manner.
The three men who left Goldman to create a fund worth a quarter of a billion dollars will change the way that Wall Street works when the begin competing with their old firm. The size of their original pot alone shows that they are a force to be reckoned with.