Goldman Sachs’s private-equity business has been a ‘black box,’ but now it’s opening up

Goldman Sachs’s private-equity business has been a ‘black box,’ but now it’s opening up

MarketWatch photo illustration/iStockphoto The name Goldman Sachs conjures images of white-shoe investment bankers cutting multibillion-dollar M&A deals or underwriting major initial public offerings.

Or it might bring to mind Goldman’s massive trading floors, where stocks, bonds, commodities and currencies are bought and sold on behalf of institutional clients and wealthy individuals.

For investors, Goldman Sachs Group Inc. GS, -1.76% is one of only two banks, along with JPMorgan Chase & Co. JPM, -0.78% , included among the 30 blue-chip stocks in the Dow Jones Industrial Average DJIA, -0.03% .

Less visible is Goldman’s role as a major player in the private-equity business.

‘Private equity is a bit of a black box for Goldman Sachs and other big banks in the business. There’s not been a lot of transparency or disclosure, although the last couple of quarters the bank has increased its transparency and disclosure a little bit. But overall, investors have assigned Goldman Sachs a lower multiple than businesses that are more transparent and a bit more regulated.’

— Ellen Hazen, F.L.Putnam Investment Management Co.

Goldman provides glimpses of its activities in private equity and other alternatives in filings and presentations, with $416 billion in assets under supervision as of Sept. 30, up by about $100 billion since early 2020.

Under CEO David Solomon, Goldman has taken the alternative investing units spread throughout the firm and grouped them under the name Goldman Sachs Asset Management. The unit is led by Julian C. Salisbury, global head of asset management and a member of Goldman’s overall management committee. The alternatives business includes the former merchant-bank unit that led major buyouts in the past, as well as its special-situations group, real estate and growth equity operations.

Goldman vs. private-equity leaders

Goldman Sachs laid out details of the business for the first time at its January 2020 investors meeting, when it disclosed $320 billion in alternative assets under supervision.

That dollar figure placed it in the same ballpark as the major private-equity firms, namely Apollo Global Management APO, +0.19% , with $331 billion in assets under management, or AUM, as of roughly the same date; Blackstone Group BX, +1.86% , with AUM of $571 billion; KKR & Co. KKR, +0.04% , with $218 billion of AUM; and Carlyle Group CG, +1.26% , which had $224.4 billion AUM. Goldman’s AUM places it ahead of alternative investing units at other big U.S. banks.While institutional investors have been aware of Goldman’s buyouts […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply