WSJ: Goldman Sachs to combine four separate units with $140 billion in total assets

Goldman Sachs is combining its four separate private-investing arms to create a new larger division, the Wall Street Journal reported on Sunday, June 16.

According to the article, the new division is expected to have around $140 billion in assets, which is nearly as big as KKR & Co., a global investment firm, and about one-third the size of Blackstone, the largest alternative investment firm in the market. Goldman is trying to develop a steady, income-generating business that appeals to investors, the report included.

Months after David Solomon took over as the Chief Executive, the recent move is believed to reflect his effort “to put his mark on the firm.” While the bank has been a private partnership for most of its history, Goldman is gradually transforming into more like a modern corporation under Mr. Solomon.

“We’re developing a comprehensive plan to grow” private investing, explained Goldman President John Waldron during an industry conference in May. “This will be a multiyear effort to evolve this business into more fee revenue and a more balanced business mix.”

The core of the new division is also reported to stand as Goldman’s existing merchant-banking arm, with about $100 billion invested in private assets. The division will include the company’s special-situations group, which the article described as “an opportunistic portfolio of about $30 billion,” and the strategic investing group that makes smaller bets on financial technology startups. Both of the said clusters are currently operating in Goldman’s trading division and invest the bank’s own money.

Aside from the said groups, the new division is also reported to include some real-estate and private-equity groups, which are currently part of Goldman’s asset-management division.

The company is also planning to raise new funds, particularly in real estate, and hit the fundraising field this year for a real-estate equity fund, its first since the financial crisis, the report added.