Displaying items by tag: Goldman Sachs

Goldman Sachs Asset Management has partnered with GeoWealth to deliver customizable, open-architecture investment models for registered investment advisors (RIAs). These models, accessible through GeoWealth’s unified managed accounts (UMA) platform, include SMAs, ETFs, direct indexing, mutual funds, and alternatives, allowing RIAs to tailor them to clients’ unique goals and tax considerations. 

Starting with mutual fund and ETF models, Goldman plans to expand offerings to include equity SMAs, fixed-income solutions, and direct indexing in the coming months. Responding to demand from RIAs for scalable, personalized portfolio solutions, the partnership aims to streamline account management, simplify paperwork, and boost operational efficiency. 

Goldman’s multi-asset solutions team will power these custom models, leveraging the firm’s capabilities with API integrations across 42 tech vendors. 

Finsum: These solutions can increase flexibility greatly for RIAs and provide a streamlined process for clientele. 

While stock selection often gets the most attention, the true driver of portfolio performance is typically asset allocation, with around 90% of variability linked to how investments are distributed across asset classes. Different asset classes perform well under different economic conditions—stocks might excel in growth periods, while bonds provide stability during downturns. 

Goldman Sachs has analyzed various economic scenarios to suggest optimal asset mixes for maximizing risk-adjusted returns over the next decade. For sluggish growth or stagflation, they recommend a heavier allocation to Treasury bonds and real assets, while minimizing exposure to growth stocks. 

In a scenario of strong growth and low inflation, the maximum allocation to stocks should still be capped around 70%. Ultimately, a diversified mix, including US Treasuries, remains crucial regardless of the economic outlook.

Finsum: Keep in mind the relative risk profiles of these asset classes when constructing your portfolio. 

A new group of traders is engaging in US power markets due to the rise in generative AI, according to Sarah Kiernan of Goldman Sachs. The increasing demand from data centers, electric vehicles, and onshoring is driving power needs. 

Data center power demand is projected to grow 165% by 2030. Hedge funds and asset managers are increasingly interested in power derivatives, seeking opportunities in this expanding market. Key regions like Virginia and Texas are experiencing notable power consumption increases. 

The shift to renewable energy also contributes to the optimism in the power sector. This growing focus on power markets signifies the broadening impact of AI innovation on various asset classes.

Finsum: Take this in combination with crypto and we could potentially see a boost in significant boost in demand for natural gas. 

Goldman Sachs exceeded profit and revenue estimates with $8.62 earnings per share and $12.73 billion in revenue, driven by strong fixed income results and reduced loan loss provisions. The bank’s Q2 profit surged 150% to $3.04 billion compared to the previous year. 

Fixed income revenue rose 17% to $3.18 billion, while provisions for credit losses fell significantly. The asset and wealth management division saw a 27% revenue increase, and platform solutions revenue rose 2%.

However, investment banking fees were slightly below expectations, unlike rivals JPMorgan and Citigroup. Shares of Goldman Sachs increased by more than 1% in midday trading.

Finsum: This is evidence of the good climate for fixed income markets during extreme economic stress. 

Goldman Sachs Asset Management's alternative investments platform has raised over $20 billion for its latest senior direct lending fund, West Street Loan Partners V. 

This fund focuses on supporting private equity-backed global businesses and has already committed $4 billion across 37 portfolio companies. Direct lending, a significant segment of private credit, has grown rapidly due to fewer regulatory hurdles for non-bank entities. Goldman Sachs plans to expand its private credit portfolio from $130 billion to $300 billion within five years.

The latest fund secured $13.1 billion in equity capital, $550 million in co-investment vehicles, and $7 billion in managed accounts. Capital was raised from both existing and new investors, along with contributions from Goldman Sachs and its employees.

Finsum: Direct lending is one of the biggest streams of private credit and growing with the focus on niche assets.