Goldman Sachs is looking to sell off its investment advisory unit — a move that would reverse CEO David Solomon’s ill-fated attempt to expand the bank’s clientele beyond the ultra-rich.
The Wall Street investment giant is looking to offload its Personal Financial Management unit, which manages around $29 billion in assets.
Solomon has come under fire from both partners at the bank and rank-and-file employees who have been put off by his leadership style — as well as his moonlighting as an amateur disc jockey — as Goldman’s earnings have plunged this year.
“David is direct and focused on results,” a Goldman spokesperson had previously said.
Putting PFM up for sale would be the second time in the last year that Goldman is looking to undo a deal made by Solomon, who took over the bank in late 2018, succeeding Lloyd Blankfein.
In 2019, Solomon pushed to acquire United Capital in a deal worth $750 million. It had $25 billion in assets under management at the time.
“Personal Financial Management (PFM), our proprietary RIA (registered investment adviser) business, is a very small component of our overall wealth franchise,” Goldman Sachs said in a statement.
Goldman Sachs is looking to sell off its investment advisory unit — a move that would undo CEO David Solomon’s attempt to expand the bank’s clientele beyond the ultra-rich.REUTERS
“We see continued opportunities to invest in this segment but with less strategic impact to GS.”
The bank added: “As such, we are currently evaluating alternatives for that business as we determine where to invest our resources and where we see the greatest opportunity.”
“We expect to find an outcome that benefits both our clients and our advisors.”
The PFM is a registered investment adviser that grew out of what was once United Capital, the Newport Beach, Calif.-based firm that managed assets for high-net-worth clients — or those whose financial assets are valued at north of $1 million.
Last year, Solomon reorganized the PFM unit by folding it into its asset and wealth management unit, which counts 16,000 clients who hold $1 trillion in assets.
Earlier this year, Goldman announced it was putting up for sale its online consumer lending business, the fintech firm GreenSky, which was initially valued at $2.24 billion in 2021 but whose closing price dropped to $1.7 billion in March of last year.
Shares of Goldman Sachs were trading down by some 1.28% as of 2:30 p.m. Eastern time on Monday.REUTERS
Sixth Street is said to be leading a consortium that includes KKR, PIMCO, and CardWorks in bidding for GreenSky, according to Fortune.
Apollo Global Management is also reportedly involved in the bidding process.
Goldman is likely to take a large writedown for GreenSky.
Last week, former CEO Lloyd Blankfein denied a report that he had offered to return to Goldman to assist Solomon.REUTERS
Those involved in the bidding process have offered less than half of what Goldman paid for the company, according to reports.
Goldman’s struggles this year have reportedly caused a rift between Blankfein and his hand-picked successor.
The 68-year-old Blankfein, who so far this year has lost some $50 million due to Goldman’s falling stock price, was reportedly livid by Solomon’s performance as chief executive.
Goldman last month reported a 58% drop in earnings for the second quarter — falling short of Wall Street estimates.
Shares of Goldman Sachs were down by some 1.28% as of 2:30 p.m. Eastern time on Monday.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
