Reports

Goldman Sachs Logs Mixed Results; United Capital Boosts Quarterly Figure

Tom Burroughes Group Editor 17 October 2019

Goldman Sachs Logs Mixed Results; United Capital Boosts Quarterly Figure

Goldmans' investment management results were buoyed by its recent purchase of RIA United Capital, figures showed.

Goldman Sachs, which recently acquired the United Capital wealth management business, has reported third-quarter 2019 pre-tax earnings of $2.416 billion, a 22 per cent drop on a year before. 

Investment management revenues fell by 2 per cent year-on-year, to $8.323 and suffered far less than the group’s overall revenue drop of 6 per cent. Versus the previous quarter, however, revenues rose by 5 per cent, buoyed by the purchase of United Capital.

Investment banking – traditionally a major part of Goldmans’ business – logged a 15 per cent revenue drop from a year earlier, at $1.687 billion, the Wall Street firm said in a statement. A drop in completed merger and acquisition deals accounted for some of the fall, as did a drop in initial public offerings.

At the investment management side, total assets under supervision in Q3 stood at $1.762 trillion at the end of September, rising by 14 per cent on a year before. Management and other fees in the IM segment rose by 3 per cent ($1.457 billion) but incentive fees collapsed by 78 per cent to $45 million. Transaction revenues slid 15 per cent to $166 million, Goldman Sachs said. 

Over the past five years, total cumulative long-term asset under supervision net inflows have amounted to about $195 billion.

Goldman Sachs bought United Capital Financial Partners for $750 million in cash. The firm is a registered investment advisor with $25 billion of assets under management and over 220 financial advisors serving 22,000 clients in over 90 offices across the US. Before that deal, Goldmans’ wealth management offering was pitched at the higher echelons of the ultra-high net worth client space. 

The RIA acquisition broadens the Goldmans' offering at a time when firms are scrambling to tap into an expected $30 trillion wealth transfer from Baby Boomers.

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