Goldman Sachs to sell fixed income app

Goldman Sachs to sell fixed income app

Investment bank Goldman Sachs is near to finding a buyer for its investment app Simon, according to reports.

Potential buyers include JP Morgan, HSBC, Credit Suisse, Wells Fargo and insurer Prudential for a deal which values the online trading tool at $100m is expected to be completed in a matter of weeks.

Simon, an acronym for Structured Investment Marketplace and Online Network, is designed to help banks sell complex fixed income instruments to retail brokers with a focus on structured notes.

It is another instance of Goldman spinning off its internal technology to the wider market. Previous examples include its trading and risk management system SecDB and a number of internet chat tools and email apps which have been subsequently spun-off into independent companies.

Simon was originally developed as an interface between the bank's securities desk and its own private bankers looking to buy structured notes on behalf of their wealthy clients.  

The structured notes market is booming at present - in the US, volumes went from $37bn to $55bn between 2016 and 2017 according to data provider mtn-i. 

However, Simon failed to gain traction with the rival banks it was targetting, largely as a result of Goldman's ownership. Furthermore, some of these rival banks, including Morgan Stanley and Bank of America, then invested in a rival product called Luma, prompting Goldman to step up its search for a new owner for Simon. 

Goldman will reportedly retain a minority stake in Simon once it is sold while the staff that set up and ran the service since its launch in 2015 will leave the bank to continue their roles. 

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