- The Wall Street giant Goldman Sachs Group Inc's GS asset management arm plans to significantly reduce the $59 billion of alternative investments that weighed on the bank's earnings.
- The unit seeks to divest its positions over the next few years and replace some of those funds on its balance sheet with outside capital, said Julian Salisbury, the chief investment officer of asset and wealth management at Goldman Sachs, in an interview with Reuters.
- Last week, Goldman Sachs reported fourth-quarter revenue of $10.59 billion, which missed average analyst estimates of $10.83 billion. Quarterly earnings of $3.32 per share, which missed average estimates of $5.48 per share.
- The bank will provide further details on its asset plan during Goldman Sachs' investor day on Feb. 28, he said.
- Goldman Sachs' asset and wealth management posted a 39% decline in net revenue to $13.4 billion in 2022, with its revenue from equity and debt investments sinking 93% and 63%, respectively.
- "Obviously, the environment for exiting assets was much slower in the back half of the year, which meant we were able to realize less gains on the portfolio compared to 2021," Salisbury said.
- If the environment improves for asset sales, Salisbury said he expected to see "a faster decline in the legacy balance sheet investments."
- "If we would have a couple of normalized years, you'd see the reduction happening," in that period, he said.
- Friday, the Federal Reserve launched a probe investigating Goldman Sachs' consumer business and whether the division exercised appropriate oversight as it ramped up lending.
- Price Action: GS shares closed at $341.84 on Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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