More Fintech Drama as Goldman Sachs & Morgan Stanley Duke It Out


By Cindy Taylor/Publisher

We just wrote a piece about Morgan Stanley & Goldman Sachs’ ongoing and forevermore “battle of the titans” and then earlier this week, we learn they are back at it again on another front – this time, Brazil.

What is up with these two financial behemoths?  The two have long been fierce competitors on several fronts, most notably investment banking, but it appears they are not planning to give up one inch as the fintech category heats up internationally, either.

Here’s a look at two of the latest battlefronts for share of market – Brazil and crypto.

Brazil
Morgan Stanley is following Goldman Sachs Group Inc. in lending to Brazil’s booming fintech industry in search of higher yields, according to four people with direct knowledge of the matter.

Morgan Stanley bought about 50 million reais ($14 million) in local subordinated bonds from Geru Tecnologia e Servicos SA, an online lender to individuals, two of the people said, asking not to be named because no public announcement has been made.

The purchase follows Goldman Sachs’s decision last year to extend a 455 million-real credit line, along with Fortress Investment Group LLC, to Nubank, a company that offers credit cards and checking accounts with all interactions handled through a mobile app.
(source: Bloomberg News)

Cryptocurrencies
Well-sourced and credible ‘rumors’ have sprung up that there is a crypto trading race on between Goldman Sachs and old rival Morgan Stanley. Both firms realize that the digital asset/crypto world is THE next super hyper area of growth (and profits) and the race to be number 1 in the space is on.

Morgan Stanley is planning a trading desk specifically for institutional cyrpto trading, arbitrage and ICOs. Their target is “crypto-focused” hedge funds, not pure crypto funds, but rather those that are building out additional exposure to their already established structures. Goldman seems to be taking a slightly different path by using a third party such as Circle and others to establish connections. Either way, the rush to get into the crypto pool is massive. Everyone wants to put their swimsuits on (it is Spring) and make sure they get into the deep end of the pool.
(source: FintekNews)

More entertainment for us all as we watch these two firms chasing each other from one category to the next.  We wonder where the next area of competition will lead us with these two, and we’ll report on it as soon as we hear.