Tag: Sachs

Goldman Sachs brings $100 million rural small business investment program to Arkansas

by  on  in Business Investment News

Goldman Sachs 10,000 Small Businesses announced Friday (Oct. 27) it has expanded its $100 million “Investment in Rural Communities” initiative to Arkansas and is making a $20 million commitment to Community Development Financial Institution (CFDI) Hope Enterprise Corporation to foster job creation and help catalyze economic growth across the region.

The new initiative, which first launched in North Dakota in September, is an extension of Goldman Sachs’ successful 10,000 Small Businesses program, which it says has served over 14,000 businesses across the country for more than a decade by providing access to education and capital. The initiative plans to reach rural small business owners in 20 states in the next five years.

“We are thrilled to expand our 10,000 Small Businesses program by partnering with the University of Arkansas – Pulaski Technical College and Hope Enterprise Corporation,” said Goldman Sachs Chairman and CEO David Solomon. “Through our work together, we can provide rural entrepreneurs with the resources, education and access to capital they need to create jobs and grow the economy.”

As part of the $100 million commitment of the initiative, Goldman Sachs is partnering with Hope Enterprise Corporation to provide support to rural small business owners in Arkansas and across the region. In addition to investing in CDFIs to provide loans to small businesses, the broader initiative also provides funding for the 10,000 Small Businesses education program at local community colleges and capacity-building grants to support access to capital.

“Access to capital is a top priority for small business owners across the country,” said Hope Enterprise Corporation Bill Bynum. “We look forward to our continued partnership with Goldman Sachs to provide the financial stability that growing businesses need to thrive – in Arkansas and other under-resourced rural communities across the South.”

Survey data released by Goldman Sachs last

…

Goldman Sachs considers selling part of wealth business

by  on  in Business Investment News

Goldman Sachs is considering selling part of its wealth management division, the registered investment advisor unit formerly known as United Capital Financial Partners, in a bid to shift its focus back to the ultra-rich, the company said Monday.

The Wall Street titan’s RIA, since renamed Personal Financial Management, caters to the high-net worth and oversees approximately $29 billion in assets under management. This division was integrated into the Goldman portfolio through the acquisition of United Capital in 2019 in a deal worth $750 million.

While a clear effort to broaden the bank’s client base, PFM has retained a relatively modest presence in the overall business. Goldman’s private wealth unit, geared towards the ultra-high-net worth, safeguards a colossal $1 trillion in assets and has more than 16,000 clients.

Reuters said that news of a potential sale, which was first reported by Citywire, comes after CEO David Solomon spearheaded a comprehensive reorganization, dividing the institution into three distinct units, while simultaneously scaling down the bank’s objectives for its consumer-oriented operations. The bank’s fintech venture, GreenSky, is also for sale.

Solomon is a man under pressure to reverse the storied bank’s fortunes after the bank’s second-quarter profits plummeted by a staggering 60%. This dismal performance was attributed to write-offs linked to its consumer-centric endeavors and real estate investments, which inevitably impacted earnings.

Solomon’s character is also under the microscope after he was the subject of a recent New York Magazine profile, headlined “Is David Solomon Too Big a Jerk to Run Goldman Sachs?” The Financial Times has since reported he retains board and investor backing amid an “internal backlash.” These issues will reportedly be on the agenda of the bank’s board meeting next month.

People familiar with several members of the board say they remain supportive of Solomon and “had taken the

…

Goldman Sachs explores investment adviser sale in retreat from mass market

by  on  in Business Investment News

Receive free Goldman Sachs Group updates

Goldman Sachs is exploring a sale of the investment advisory business it acquired four years ago, marking a further retreat from efforts to be a major bank to mass-market customers.

The Wall Street firm said on Monday it was “evaluating alternatives” for its personal financial management business, which encompasses Goldman’s registered investment adviser operations and supervises about $29bn in assets.

The business grew out of United Capital, a California-based investment adviser that Goldman acquired for $750mn in 2019. The deal came as Goldman was pushing to serve a broader array of customers.

It is now the second deal executed under chief executive David Solomon that Goldman is looking to undo. The bank this year put up for sale GreenSky, the online lending business that it acquired in 2021.

“We expect to find an outcome that benefits both our clients and our advisers,” the bank said of the personal financial management business, whose potential sale was reported last week by Citywire RIA.

Goldman’s wealth management operation has historically been weighted more towards the super-rich — so-called ultra-high net worth clients — whose wealth is at least in the tens of millions of dollars.

United Capital’s customers typically had more modest fortunes. The deal four years ago was a sign of Goldman’s efforts to serve a broader array of customers.

Losses from the push into mass-market banking have contributed to pressures on Solomon, who is contending with the most challenging period of his nearly five-year tenure as chief. Aside from plans to sell GreenSky, Goldman last year decided to pare back its Marcus online retail banking business.

Solomon has so far retained the backing of the Wall Street

…

Goldman Sachs Weighs ‘Alternatives’ for Investment Advisor Business

by  on  in Business Investment News

Text size

Goldman Sachs said personal financial management is a very small part of its overall wealth-management business.


Michael M. Santiago/Getty Images

Goldman Sachs

’ transformation continues, with the Wall Street firm saying Monday that it is “currently evaluating alternatives” for its personal-financial- management business.

The move comes at a challenging time at the bank. A slump in deal making caused the company to miss forecasts for its profits in its most recent quarter. And its chief executive, David Solomon, has been at the center of media reports questioning his leadership.

Goldman’s personal-financial-management business was born out of the bank’s earlier ambition to serve more so-called mass affluent consumers. The firm began bulking up in that area with the acquisition of United Capital for $750 million in 2019. As of the end of 2022, the unit had approximately $29 billion in assets under supervision, according to regulatory filings.

Meanwhile, the whole of Goldman’s wealth-management business, which caters to so-called ultrahigh net-worth customers, has $1 trillion in assets under supervision spread across 16,000 clients. While Goldman plans to continue to invest in wealth management, it is looking to be more strategic and focused in that effort.

“Personal Financial Management (PFM), our proprietary RIA business, is a very small component of our overall wealth franchise,” Goldman said in a statement announcing plans to seek alternatives. “We expect to find an outcome that benefits both our clients and our advisors”

Citywire RIA. reported news of the possible sale on Friday.

It isn’t the only about-face Goldman has done recently. Goldman has plans to sell GreenSky, the online lending platform it acquired in 2021. And the bank has also been winding down Marcus, the online consumer-banking business Goldman launched in 2016. Earlier this year, the bank sold some of its Marcus lending portfolio in

…

Goldman Sachs weighs selling part of wealth business in broad strategy revamp

by  on  in Business Investment News

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo Acquire Licensing Rights

NEW YORK, Aug 21 (Reuters) – Goldman Sachs (GS.N) is weighing the sale of a part of its wealth business, it said on Monday, as it shifts its focus back to serving the ultra-rich and away from high-net-worth clients in mass markets.

The Wall Street bank is evaluating alternatives for its registered investment adviser (RIA) unit, called Personal Financial Management (PFM), which manages about $29 billion, it said in a statement.

The shift in strategy comes after CEO David Solomon reorganized the firm into three units last year and scaled back ambitions for its consumer business, which lost $3 billion in the last three years.

Goldman is also pushing ahead with a sale of its fintech business, GreenSky and has also offloaded the bulk of its unsecured consumer loans after it halted this kind of lending last year.

“This is part of the overall restructuring of the firm, back toward its roots,” said Stephen Biggar, an analyst at Argus Research.

“They’ve been unable to carve a path of profitability and scale” for the RIA, which catered to high-net-worth individuals in mass markets outside of Goldman’s core, ultra-wealthy clientele, Biggar said.

Goldman declined to comment on PFM’s earnings.

The company’s shares slipped 0.6% in afternoon trading, compared with the S&P index of bank stocks (.SPXBK), which rose 0.2%.

Goldman bought RIA, formerly known as United Capital Financial Partners, for $750 million in 2019 when it managed about $25 billion in funds. The purchase was aimed at broadening Goldman’s client list beyond the ultra-rich, but the unit has remained a small part of the bank’s wealth business.

Goldman’s

…

Exclusive: Goldman Sachs to cut asset management investments that weighed on earnings

by  on  in Business Investment News

NEW YORK, Jan 23 (Reuters) – Goldman Sachs Group Inc’s (GS.N) asset management arm will significantly reduce the $59 billion of alternative investments that weighed on the bank’s earnings, an executive told Reuters.

The Wall Street giant plans to divest its positions over the next few years and replace some of those funds on its balance sheet with outside capital, Julian Salisbury, chief investment officer of asset and wealth management at Goldman Sachs, told Reuters in an interview.

“I would expect to see a meaningful decline from the current levels,” Salisbury said. “It’s not going to zero because we will continue to invest in and alongside funds, as opposed to individual deals on the balance sheet.”
The move is an extension of a strategy laid out in 2020, as the bank aims to reduce its on-balance sheet investments and boost earnings from fees.

Goldman had a dismal fourth quarter, missing Wall Street profit targets by a wide margin. Like other banks struggling as company dealmaking stalls, Goldman is letting go of more than 3,000 employees in its biggest round of job cuts since the 2008 financial crisis.

The bank will provide further details on its asset plan during Goldman Sachs’ investor day on Feb. 28, he said. Alternative assets can include private equity or real estate as opposed to traditional investments such as stocks and bonds.

Goldman oversaw a record $2.55 trillion in assets at the end of last year.

“As we raise more third-party capital, that (balance sheet investment) becomes a smaller percentage of a growing pie,” Salisbury said.

EARNINGS VOLATILITY

Slimming down the investments on a bank’s balance sheet can reduce volatility in its earnings, said Mark Narron, senior director of North American banks at credit rating agency Fitch Ratings. Shedding investments also cuts the amount of so-called

…