Goldman and Morgan Stanley to Expand Wealth Management

Christopher Owen

14 November 2007

Goldman Sachs is expanding its private wealth management business in emerging markets to build ties to a new generation of entrepreneurs, who may also become banking clients. Speaking at a Merrill Lynch Banking & Financial Services Conference, Goldman chief executive Lloyd Blankfein said emerging economies have crossed the "tipping point" in terms of becoming full fledged members of the global capital markets. "We are determined to grow our footprint in these markets," Mr Blankfein said, part of a strategy he called "chasing GDP around the world." Goldman is opening or expanding offices in Mumbai, Moscow, Sao Paulo, Dubai, Doha and, soon, Tel Aviv, Mr Blankfein said. The bank has also invested about $1 billion in its India business and it is still negotiating a joint venture with Saudi Arabia's largest commercial bank. Goldman has obtained broker-dealer licences in China, India, Russia, Brazil and South Korea, which will let it pursue a range of financing and banking businesses. In addition to on-shore wealth management in China and Brazil, Mr Blankfein said Goldman is expanding its Swiss bank unit to attract more offshore assets from investors in the Middle East, Russia, Latin America and Asia. Speaking at the same conference Morgan Stanley chief financial officer Colm Kelleher said the company will redirect capital to more lucrative areas such as emerging markets, commodities, wealth management and asset management. Mr Kelleher said Morgan wants to acquire a private bank that will cater to ultra-wealthy individuals, part of a broader wealth management push funded in part by Morgan's sale of its UK brokerage unit, Quilter Holdings. "Our private banking business is key to the growth of our global offshore private wealth management business," Kelleher said. "We will consider acquiring a private bank if the opportunity presents itself at the right price."