Peter MacDonald, one of Goldman Sachs' most respected old Asia hands, is bowing out of the firm. The Hong Kong-based head of Asian equities, and a key architect of the Wall Street bank's mainland banking joint venture, is retiring after 17 years. 'It is a good time to retire,' said a local headhunting executive. 'The golden years, even for Goldman, are going to take a long time to come back.' Mr MacDonald set up Goldman's Gao Hua with star mainland banker Fang Fenglei and was its chief operating officer from 2004 to 2006. He then took the top job at Goldman's Asian equities practice, which is a stockbroking business. Like most banks, Goldman is struggling. It handed its employees a lavish US$20.2 billion in bonuses for 2007. Last year's payout has not been disclosed, but the bank has said partners received 75 per cent less this year, while employee bonuses fell 65 per cent. The bank seemingly walked on water in the early stages of the credit crunch. While its rivals suffered huge losses following substantial asset write-downs, Goldman, whose savvy traders bet in 2007 that subprime mortgages would fall in value, was the last big United States bank to post a quarterly loss during the crisis. It eventually slipped US$2.1 billion into the red in the final three months of last year. Its shares, once a huge source of wealth for senior bankers with lucrative options packages, plunged 45 per cent in the past 12 months. Goldman is also cutting jobs in Asia. It plans to axe 5 per cent of its 1,000-person Hong Kong staff by the end of March, and it is believed that some junior traders and analysts left the firm last week. People who know Mr MacDonald say he was a visionary leader who played a crucial role in establishing Goldman as the first international bank on the mainland. He left Gao Hua in 2006, and for reasons unrelated to his departure, Goldman has had a rocky time on the mainland since then. Gao Hua's former chief executive, the well-connected Mr Fang, left to set up his own private equity firm in 2007. He remains chairman at Gao Hua but his involvement is greatly reduced from the early days. And while Gao Hua was expected to assure Goldman's dominance on the mainland, the Wall Street bank has faced tough competition from homegrown mainland rivals in recent years as well as Swiss bank UBS, which won its mainland securities licence in 2006. Goldman ranked fifth in terms of investment banking fees earned on the mainland in 2007, while UBS came second. Goldman did not make the top 10 last year, according to Dealogic, while UBS retained its second place. Mainland broker Citic Securities ranked first. Gao Hua has also not underwritten any domestic equity offerings since 2007 and slipped to ninth place advising mainland companies on mergers last year from fourth in 2007, according to Bloomberg. Goldman is moving highly regarded Mark Machin, its co-head of Asia investment banking, from Hong Kong to Beijing in a bid to improve its mainland fortunes. He will work closely with Gao Hua president Cai Jinyong. Five mainland banks were featured in the mainland investment banking top 10 last year, up from four in 2007. Notably, last year, Aluminum Corp of China selected domestic bank China International Capital Corp as adviser in its high-profile bid for Anglo-Australian miner Rio Tinto Group. Traditionally, global banks have counselled mainland businesses on such complex cross-border transactions.