Under CEO David Solomon, 150-year-old Wall Street icon The Goldman Sachs Group is now taking on a bit more of a Main Street flavor.
“Goldman Sachs is in the midst of a radical transformation as CEO David Solomon makes his mark on the storied investment bank,” according to Business Insider. “The firm is moving away from high risk, unpredictable businesses like trading that were once lucrative but have slowed, and towards more stable areas like its Marcus consumer lending product and a credit card partnership with Apple.”
Last week, the New York City based-company closed its “culture-shifting” $750 million cash deal of United Capital Financial Partners Inc., a registered investment advisor based in Newport Beach, California. The RIA has $25 billion of assets under management and more than 220 financial advisors serving 22,000 clients in more than 90 offices across the U.S.
United Capital complements Ayco, Goldman Sachs’ financial executive counseling and investment advisory business, which serves many of the largest corporations in the country, Solomon said in the company’s second-quarter earnings call.
“On a combined basis, Ayco and United Capital will serve clients with over $80 billion of assets under supervision, representing a strong base from which to grow our mass affluent wealth franchise,” he said. “It remains our ambition to continue to serve ultra-high net-worth individuals through our longstanding PWM business. Individuals with $1 million to $5 million of investable assets through Ayco and the broader mass affluent segment through a hybrid of digital and human engagement as an extension of markets over time.”
As for its earnings performance, Goldman Sachs Group delivered “far better second-quarter revenue and earnings than expected,” according to Barron’s. Goldman reported $9.5 billion in revenue and per-share earnings of $5.81, while analysts had expected the bank to report $8.9 billion in revenue and $4.89 in earnings per share, according to FactSet.
“We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients,” Solomon said in the earnings release. “Given the strength of our client franchise, we are well positioned to benefit from a growing global economy. And, our financial strength positions us to return capital to shareholders, including a significant increase in our quarterly dividend in the third quarter.”
Solomon became Goldman Sachs’ CEO in October 2018 and this January was named chairman of the board. Previously, he was president and chief operating officer and prior to that, he served as co-head of the investment banking division from 2006 to 2016.
Before that, Solomon was global head of the financing group, which includes all capital markets and derivative products for the firm’s corporate clients. He joined Goldman Sachs as a partner in 1999.
He’s No. 73 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies
Headquarters: New York City
Education: B.S. in political science, Hamilton College
First joined company: 1999
Prior to joining Goldman Sachs: Bear Sterns
Named CEO: 2018