Specific terms of the deal have not been disclosed. ![]() Folio also told clients that Goldman was “very interested in and committed to RIA custody,” one of the clients told RIA Intel.Īt the time of the deal, Folio had 160 employees and approximately $11 billion in assets under custody for about 450 RIAs. The week before the deal was publicly announced, Folio called RIA clients to share the news and inform them that no immediate changes were planned. Goldman and Folio began discussions about a possible deal in 2019 and the bank agreed to buy the McLean, Virginia-based company in May. Over time, this will further diversify the firm’s funding mix, and add durable recurring revenues to its Global Markets Division.” “Looking forward, RIAs will have access to rich analytics and services through a comprehensive suite of Application Programming Interfaces (APIs), all part of a fully-integrated Goldman Sachs execution, clearing, and custody solution. This will enhance the firm’s own offerings to RIAs while expanding its client base in that segment,” the investment bank said in a statement. “Folio Financial has developed a differentiated technology offering that provides institutional grade clearing and custody services to RIAs. And while we've made progress, there is still work to do.The competition to custody RIA assets officially increased Monday, as Goldman Sachs closed its deal to acquire Folio Financial and confirmed its interest in serving more RIAs. "It is a strategic priority to continue to reduce these positions. "Segment returns were in the mid-single digits as our on-balance sheet investments remained susceptible to volatility in asset prices," he said, according to the Seeking Alpha transcript. While he reiterated the company's pledge to "grow our asset and wealth management business" as one of its two main strategies alongside strengthening the megabank's overall franchise, Solomon stopped short of any boasts about the unit's record assets and management fees. Revenue for the unit climbed 24% in the past 12 months. In the first quarter of last year, it had only produced a "non-material" amount of profit, according to the firm's investor presentation. Wealth and asset management earningsįor the quarter, the unit generated net earnings of $496 million on revenue of $3.22 billion. However, the partial sale of Goldman's Marcus loan portfolio under the firm's move to pivot away from much of its consumer-facing services caused a loss of $470 million as the firm offloaded the assets and transferred any remaining ones to a portfolio held for sale. That line gained a greater yield from spreads on client deposits. The unit's business from private banking and lending tumbled by 28% year over year to $354 million in the quarter. A reduction in fee waivers for money market funds tied to the previously low interest rates last year also drove the higher numbers in the unit's largest business line. In addition, management fees and other business from alternative investments grew 21% to $494 million. Goldman paid the equivalent in Euros of $1.87 billion for the firm, which has more than 900 employees and represents a top five active asset manager globally. Management and other fees surged by 12% from the year-ago period to a record $2.28 billion in the first quarter, after Goldman included the incoming business stemming from its acquisition of European asset manager NN Investment Partners earlier this month. ![]() Assets in the Americas constituted 71% of the unit's holdings. Goldman's wealth and fund arm still benefited from net market appreciation of $68 billion in the quarter. Those incoming assets represented $9 billion less than the same period last year, and Wall Street investors took note of the fact that Goldman's bond trading across the entire firm failed to drive as much business as other megabanks. Wealth and asset management client assetsĪssets under supervision jumped 12% year over year to a record $2.67 trillion in the first quarter after net inflows of $8 billion. Unless otherwise stated, the metrics below relate to Goldman's Asset & Wealth Management segment. ![]() Note: The company doesn't break out most specific metrics for its wealth management business, including the number of financial advisors and client assets at the former United Capital and the level of custodial holdings in the unit once called Folio Financial. Goldman Sachs wealth profits jump as firm eyes international business
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