Goldman Sachs has set up a disaster recovery trading floor in a WeWork office in central London to enable the bank to continue operating in the event of a major disruption.
The US bank, which advised the shared-office provider during its ill-fated IPO process this summer, has rented the space to replace an existing facility on Paternoster Square near the London Stock Exchange.
Hosting a trading floor is an unusual venture for WeWork, which specialises in shared offices known for freshly ground coffee and fashionably decorated communal areas, but the Goldman unit is not the first time it has done so, according to a person familiar with the group. The trading floor will be operational by the end of 2019.
The new facility is a “near-site business continuity location” where the bank’s most critical London traders could quickly relocate in the event of an emergency affecting its new £1.2bn European headquarters at nearby Plumtree Court.
A more serious disaster affecting the broader area would result in Goldman’s staff moving to a more distant site in Croydon on the edge of the UK capital.
Goldman’s new trading floor is in WeWork’s facility on Waterhouse Square at 138-142 Holborn, a renovated Victorian building. The bank is moving its European headquarters from Fleet Street to nearby Plumtree Court, an 826,000-square-foot building opened this year. WeWork and Goldman declined to comment.
WeWork has been seeking to attract major financial groups, in part by providing secure facilities for banks, and has leased more than 1,000 desks to HSBC at a Waterloo site.
Separately, WeWork is in talks to lease Goldman’s former headquarters on Fleet Street, which is owned by an overseas investor.
“Business continuity” sites such as Goldman’s new trading floor are part of the bank’s broader system for dealing with potential disruptions from storms to cyber-security breaches or “a significant reduction in our workforce due to illness, injury or death”, according to documents published on the bank’s website.
Regulators set out broad guidelines for business continuity plans for banks and other financial services groups to ensure the resilience of the financial system.
WeWork itself is in crisis following the collapse of its IPO process last month and the departure of chief executive Adam Neumann. The ratings agency Fitch last week downgraded WeWork to a CCC+ rating, saying it estimated the group had enough cash and cash commitments for about four quarters.
Fitch said “the risk that the company is unable to restructure itself successfully has increased materially”.
Along with other banks such as JPMorgan, Goldman Sachs advised WeWork during its ill-fated attempt at a public listing. Goldman told the company, which has been backed by Japan’s SoftBank, that it could be worth $61bn to $96bn in the IPO.
In the event, WeWork failed to secure support from investors even at valuations far lower than the $47bn at which it was valued following its most recent funding from SoftBank.