Lewis Goldman, "Lucky Lew" as his friends call him, has
forged a career out of developing and distributing new products
and strategies for beneficial owners in the fixed income
The native New Yorker has structured, priced,
marketed and sold structured securities to
countless institutional money managers, broker dealers,
and trading desks at bond houses globally. Most
of his time is spent dealing in the US Treasury
market – the deepest and most liquid in the world.
Back in 2010 while enjoying the festivities of his twin sons
Bar Mitzvah party, Goldman collapsed as a result of sudden
cardiac arrest and was saved by his two best friends since the
age of 11 who were there with him on the dance floor. His
friends happen to be cardiologists. Lucky Lew.
Three years later he set out on his own to form his own
business, Goldman Landow Capital, named from his
grandparent’s surname. Working with his
longtime friend and colleague Marc Greenspan, Goldman hopes
luck extends to his latest venture, US Treasury Alpha PLUS - a
process designed to allow pension funds, corporates and other
institutional investors to enhance the yield on their US
The technique revolves around back-to-back repo agreements,
allowing beneficial owners to maintain ownership of their
original T-Bills or Treasury Notes while earning fees from
substitutions of collateral carried out with an approved
counterparty. In exchange for the potential yield enhancement,
the beneficial owner must be indifferent to holding and
potentially owning Treasuries that mature within a 16-day
"Anytime you can add additional alpha without adding risk it
would be prudent to do so," Goldman said. "In the case of Alpha
PLUS after considerable vetting with experts in the field of
yield curve analysis, the conclusion is the 16 day potential
maturity differential is, even in extreme volatility,
insignificant compared to the potential yield enhancement that
can be generated by engaging in Alpha PLUS. I would
rather forgo the few basis points of opportunity cost created
by the potential 16 day maturity differential to pick-up 15 to
35 basis points in additional alpha."
Al Kramer, a former treasurer for Carson City, Nevada - a
position he held for 20 years - is familiar with the
process Goldman and Greenspan are promoting. "I used a
virtually identical technique back in 2004 when managing $40m
of US Treasuries for Carson City," Kramer told Global
Investor/ISF. "It made a lot of sense to me. Every
transaction led to a positive gain. We saw returns in excess of
42bps over two years.
"If you own treasuries, why wouldn’t you
enhance them? Admittedly it’s a niche area.
Maybe the enhancement from the technique isn’t
enough to persuade you to put more money in treasuries, but
that’s not what this is about," Kramer added.
Goldman will be speaking to some of the largest US pension
funds this week in Florida at the IMN’s Securities
Finance and Collateral Management Conference. He’s
confident Alpha PLUS will prove popular in the end, although he
admits widespread adoption is a long-term goal.