Asset Management Division of Goldman Sachs Group Inc plans to significantly reduce alternative investments totaling $59 billion which affected the bank’s revenues.
Julian Salisbury, Chief Investment Officer of Goldman Sachs’ Asset & Wealth Management said that the Wall Street giant intends to abandon its positions over the next few years and replace a portion of those funds on its balance sheet with external capital.
The fourth quarter was quite disheartening for Goldman Sacks as the company failed to meet the Wall Street earnings predictions by a large margin. Like other banks struggling to make deals with companies, Goldman Sacks is letting go of more than 3,000 employees in the largest layoff since the 2008 financial crisis.
During Goldman Sachs’ Investor Day on February 28, the bank will be sharing more information as far as its asset plan goes. Alternative assets may include private equity or real estate in contrast to traditional investments such as stocks and bonds.
Goldman Sachs reported a 39% drop in net revenues, to $13.4 billion in 2022, while gains resulting from stock and debt investment fell 93% and 63%, respectively, according to revenue figures released last week.
As reported by Reuters, Goldman Sachs' Wealth Management Arm closed a $15.2 billion fund earlier this month with the intention to make junior debt investments in private equity-backed businesses.
Based on information from Reqin, private credit assets in the industry have more than doubled reaching over $1 trillion since 2015.
Salisbury also reported that investors are also interested in private equity funds as they seek to gain positions in the secondary market when existing investors sell their shares.
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