Goldman Sachs President and COO John E. Waldron reiterated the firm's commitment to face the RIA community as a customer base at Bernstein's 40th Annual Strategic Decisions Conference on Thursday. Waldron sees a significant opportunity to do this by providing RIAs with access to alternative investments in open-ended fund envelopes as the firm grows its fundraising business.
Waldron said Goldman remains underrepresented in the asset and wealth management space at the moment. She would like to grow the business at margins in the mid-20% range, with returns in the mid-teens. For Goldman's in-house wealth management business, which is focused on ultra-high-net-worth clients, part of that growth will come from offering greater personalization.
“Our clients … want more SMAs, they want more direct indexing, they want active ETFs in a structured form, they want tax solutions,” Waldron said. “And what I feel good about here is that we've actually spent a lot of time over the last nine years building these capabilities, building custom investments and custom solutions. A prime example would be our outsourced CIO platform.”
Goldman also plans to expand its line of alternative products, making it available to the widest wealth channel through wirelines, brokerage platforms and RIA relationships. Firm recently closed a $21 billion private credit fund and a secondary fund of $14 billion. It will begin raising capital for a private equity-focused fund “immediately,” Waldron noted — the firm plans to raise between $40 billion and $50 billion for alternative funds this year. In the first quarter, these fundraising efforts already reached $14 billion.
The firm has raised $265 billion for investments in alternatives since 2019, and about 40% of the capital for those funds came from Goldman's wealth management business, where clients have an appetite for the type of product and finance to deal with. limited liquidity. But the firm is also putting its products on other banks' wealth management platforms, Waldron noted.
“You're going to continue to see us putting our products on other people's platforms across the estate, which I think will be a much bigger contributor to our growth over time, along with our channel of wealth, which will continue to be a very large contributor. he said.
Waldron mentioned that the firm would like to offer a wide range of alternative options to protect itself from the challenges that will inevitably come with the turn of market cycles. However, he sees allocations to alternatives as a long-term secular trend.
“The pace of growth will wax and wane over time, but you will see fairly consistent growth well above inflation,” he noted.