View from City Road: Goldman partner's amicable parting

In the tradition of smooth transitions that has characterised management change at Goldman Sachs, it seems that Stephen Friedman really is leaving his post as senior partner simply because he is exhausted. While it is true that profits at Wall Street's last big partnership are running two- thirds below last year's astounding dollars 2.3bn, the search by cynics for ulterior motives has failed to turn up any signs of serious discord.

Nevertheless, it is plainly time for change at Goldman; 1994 has been a time of almost universal frustration for the firm, and that is not just because the market has 'tanked', as its American partners would say. A big source of that frustration has been the anachronistic ownership structure that for so long was the firm's greatest strength.

The pressure to bring talented newcomers into key jobs means veterans are forced into early retirement as 'limited partners'; Mr Friedman himself is only 56. Even the lure of dollars 5m a year in profit disbursements - the partners' average award last year - hasn't prevented defections by some big producers. More than one of the firm's most promising bond-arbitrageurs has turned down a Goldman partnership in recent years.

Mr Friedman was the last vocal opponent of Goldman 'going public', of following rivals such as Salomon Brothers and Lehman Brothers into a listing on the New York Stock Exchange. The timing of his resignation is thus unfortunate for one reason alone: this is probably the worst time in the past five years to be considering floating a securities firm.