As with so much else at God’s own Wall Street bank, asset management always meant something a bit different at Goldman Sachs than at other firms. Something somewhat more elevated and refined. Of course, there were mutual funds and ETFs, but the words “Goldman Sachs Asset Management” had different connotations: a sovereign clientele, hopelessly complicated structured products for only the most elite and sophisticated of investors, private equity, the Cadillac of hedge funds and, better yet, a hedge fund of hedge funds—nothing so tacky or bourgeois as a fund of hedge funds, mind you, but a hedge fund that owned other hedge funds. Within those once-hallowed halls, an investment opportunity was more likely to mean a wine fund than a plain-vanilla bond one.
But Goldman is committed to becoming more common and approachable, a bit more like Morgan Stanley (at a time when Morgan Stanley is committed to becoming less like Morgan Stanley). And so it has embraced the tawdry and the vulgar: online baking, online lending, credit cards, house flippers, mortgages. This democratizing impulse has now, at last, come for GSAM, and in the most oafish and off-putting way imaginable.
Wells Fargo is considering a sale of its asset management unit, which has pushed a shortlist of firms, including Goldman Sachs, to the forefront as potential buyers for the $578 billion money manager….
"The pool of potential buyers may be small since smaller asset managers may not be able to do a large deal given (Wells') AUM scale and larger managers may not be interested to do a deal in order to simply obtain cost (savings) and increase scale but also increase execution risk," the analyst note said. "We would note that one potential buyer could be Goldman Sachs as the company is looking to grow asset management and also could look to sell additional products to (Wells') wealth management business as a strategic partnership…."
Goldman CEO David Solomon said during the firm’s Oct. 14 earnings call that leadership “certainly are aware of the continued consolidation that’s going on in the asset management industry.” As merger and acquisition opportunities come up, the firm will “consider them if we think they can enhance our franchise and allow us to expand the strength of our franchise and our ability to serve our institutional clients, and also individual clients to our wealth business,” Mr. Solomon added.
The proletarianization of Goldman Sachs may be inevitable, Mr. Solomon, but must it be accomplished by the acquisition of an asset manager that even Wells Fargo doesn’t want? Can the RobinHood deal be far off? Not like this, D-Sol. Not like this.