Goldman Sachs’ asset management arm wants its private-credit portfolio to boast $300 billion by 2029, Reuters reported Tuesday, citing an interview with Marc Nachmann, the bank’s head of asset and wealth management.
“People are very much focused on executing our strategy around the two big businesses and are very comfortable around the direction of the firm,” Nachmann said.
The first of those two big businesses is investment banking and trading, which brings in roughly 70% of Goldman’s revenue. The bank, for more than a year, has made clear it wants asset and wealth management to be the second.
Goldman CEO David Solomon, at last year’s investor day, called the segment “the real story of opportunity for growth for us.”
A focus on asset and wealth management would fill the void left by Goldman’s now-muted push into consumer banking. The bank’s pivot served as a major focus of the reorganization Goldman underwent in 2022.
Nachmann is arguably the executive who gained the most from the pivot — namely, his position — which he could presumably parlay into front-runner status in the race to succeed Solomon if the asset management strategy goes to plan.
Goldman’s footprint in private credit, now standing at $130 billion, already far exceeds that of its rivals. Morgan Stanley laid out a plan in January to double its private credit portfolio to $50 billion in the medium term, Reuters reported. JPMorgan Chase, meanwhile, has earmarked at least $10 billion for private credit, according to the wire service. Wells Fargo and Citi is leaning on partnerships to push into the market.
At least one-third of the $40 billion to $50 billion Goldman aims to raise for alternative investments this year will finance private credit strategies, Reuters reported.
Goldman is hiring across asset and wealth management, Nachmann told the wire service. That could help balance out some of the experience the bank lost when longtime executives such as Julian Salisbury and Katie Koch left. Salisbury, Goldman’s former chief investment officer, jumped to Sixth Street last summer. Koch, once the bank’s chief investment officer of public equity, left Goldman in February 2023 to become CEO of asset manager TCW Group.
At its industry day last February, Goldman outlined plans to grow revenue organically in asset and wealth management by a high-single-digit percentage over the next three to five years. The bank also said it aimed to trim $30 billion of legacy investments to less than $15 billion by the end of 2024. To that end, Goldman is arguably ahead of schedule. Legacy investments stood at $16.3 billion at the end of 2023, Reuters reported.
“We will keep selling down over the next three to four years,” Nachmann told the wire service.”We will get to a place where it is not material from a financial impact.”
