Profile: How Fat Mike became a million dollar baby: The huge bonuses handed to partners by Goldman Sachs have left the City gasping. Jason Nisse looks at a young beneficiary: Michael Sherwood

THERE is a new unit of currency in the City. A block of dollars 5m (pounds 3.4m) is now known as a 'Goldman' in honour of the massive bonus payments being made by the US investment bank.

Since the Independent on Sunday revealed that over 100 dollar millionaires would be created by Goldman Sachs this Christmas, the City has been unable to focus on anything else.

But while Goldman's partners, who will receive the eponymous dollars 5m bonuses, have been the general target of the traditional British virtues of jealousy and a desire to knock people off their pedestals, the particular focus of the envy has been a 28-year-old employee whose Christmas stocking will be blessed with a 'mere' dollars 3m payout - Michael Sherwood.

Sherwood holds the title of head of debt syndication. To anyone outside the rarefied climbs on the Eurobond markets this means very little - syndication is a posh word for parcelling up a deal and selling it to other investors; the debt part of the title is self-evident. Within Goldman, the title has less relevance than it might have at other firms. Whereas at Morgan Stanley or S G Warburg you will find a syndicate desk, a swaps desk, a trading desk and the like, at Goldman it is less defined. Origination, trading and the related derivatives are mixed together.

One reason for this is that Goldman has only recently become a big operator in the European debt markets. It rather missed out on the mid-1980s boom in the Euromarkets (markets for bonds outside the country in whose currency they are issued), as it was concentrating its European thrust on mergers and acquisitions and equities.

Goldman decided it had to develop skill in this area. But it developed it in a particularly Goldman fashion, building on its existing skill in secondary trading (dealing in securities that already exist rather than selling new instruments) and in futures and options. The development has paid off. Coming from virtually nowhere, it leads the league table of Eurobond bookrunners in the International Financing Review and came second in the list of dealers in Euro-Medium Term Notes (securities with a maturity of between one and five years). Its success in winning mandates from blue-chip names such as Lloyds Bank, British Gas and Abbey National has astounded many rivals.

Goldman's emergence as a serious force in the European corporate debt markets has coincided with the rise of Sherwood. Like it or not, the City was beginning to see Goldman's protege as a star. And Sherwood did not appear to be trying to hide his light under a bushel either.

The attention on Sherwood is embarrassing for Goldman. It does not mind that people write about its massive bonus payments. This only goes to show that the group - one of the few partnerships left on Wall Street and easily the most successful - is doing rather well. Its profits in the year to November were dollars 2.6bn ( pounds 1.8bn) - more than double the previous year's and more than the gross national product of Tanzania. The pounds 160,000 fine imposed on Goldman for breach of securities regulations during the Maxwell affair equalled less than an hour's income.

And as Goldman is a partnership, the profits will go to its 161 partners. Its top partner in New York, Stephen Friedman, is expected to receive dollars 25m. Gavyn Davies, the Labour-leaning economist who writes for our sister paper, will draw at least dollars 5m. Despite the well-publicised line that recently appointed partners at Goldman drive second-hand Fords because they have to buy into the partnership and cannot draw all their profits, it is clear that once you are a partner, your financial worries are over - for life.

Goldman is happy that the City knows its partners are doing well. It sets the firm up as a place to go and work if you want to earn serious money. That - Goldman reckons - brings it the best people and means that it will be the best firm with the highest earnings.

It also means that Goldman can work its employees exceedingly hard. If you work for Goldman, you should expect to be on call 24 hours a day - to be in the office before seven, to leave late in the evening. A senior director of a rival firm, who worked there but resigned, said he was happy to have left despite the riches he gave up. 'I saw my children grow up, and no amount of money can compensate for missing that,' he said. But by the same token, most Goldman partners retire at around 50 to live exceedingly well.

Goldman reckons it is a virtuous circle of greed. Many firms give the impression that they think they are the best in any given field. Goldman is one of the few that gives the impression that it believes it. Its abiding theme is opposition to regulation and a belief that it can outfight the opposition, given a level playing field.

But drawing attention to the earnings of individual employees is frowned on. Unlike many firms, Goldman does not encourage the cult of the individual. It does not like to foster star analysts or traders. Everything Goldman does is a result of teamwork. The skill of a trader depends on the statistical back-up that he or she receives. The hard work of an analyst enables a salesmen to sell securities and a proprietary trader to make a useful turn on a block of shares.

As Goldman said itself, when answering inquiries about Sherwood: ''As a matter of policy, Goldman Sachs does not seek publicity of a personalised nature for members of the firm . . . we necessarily have regard for the privacy of our partners and staff and the confidentiality of our relationship with our clients.' But while Sherwood subscribes to that framework, being a Goldman man, he still sticks out like a sore thumb.

'Fat Mike', as he is known to friends and foe alike, is a career Goldmanite - not that his career has been that long. He joined the firm in 1986, straight from Manchester University where he studied economics. At the time Goldman took in a large number of graduates but politely told many more to seek employment elsewhere. Within three years, Sherwood had been promoted to head of debt syndication. Rivals describe him as both 'brilliant' and 'arrogant', remembering deals such as a series of Ecu strips a couple of years ago that flabbergasted the market, and also that he gloated heavily about them afterwards. Large bonuses are nothing new to Sherwood - two years ago his bonus topped pounds 800,000 when his basic salary was only pounds 50,000.

The son of the owner of a chemical company and a university lecturer, Sherwood was part of a group of 'rich kids' at Manchester University who stood apart from their contemporaries. They had flash cars, lived in smart accommodation and ate at expensive restaurants. No baked beans in a Moss Side council house for Mike.

Despite his portly appearance, Sherwood was renowned as a sportsman. He is an exceptional tennis player - at school in north London he came close to appearing at junior Wimbledon. Even then he was stout, though friends say the good life has added to his waistline in recent years.

He lives in north London. Having recently married the sister of the actress Allie Byrne - seen last week in The Stonehouse Affair as Sheila Buckley, the sexy secretary of the disgraced late Labour minister - he is reputedly having a house built in Regent's Park as his current home in Hampstead is too small. (The Hampstead home - it should be noted - has four bedrooms and a swimming pool.)

Along with the house, Sherwood enjoys the other trappings of a rich young man in London. He drives a Porsche. He buys the best theatre tickets but often leaves the show early if he is bored. He eats in the best restaurants, but suffers from nerves and often cannot hold down his food. Socially he can be both loud and diffident. He is reputed to keep a drawer full of cash in various different currencies.

At 28, he has the air of someone who has been everywhere and done everything. This year, he is expected to be made a partner at Goldman. It would be sad if he reached 30 and found he had nothing left to achieve.

(Photograph omitted)