Average Goldman Sachs Client Invests $40 Million With Firm

Average Goldman Sachs Client Invests $40 Million With Firm

The average Goldman Sachs Group Inc (NYSE:GS) client has $40 million under management with the firm, as assets under supervision climbed to a record $1.08 trillion and investment banking advisory net revenues continued to remain at the top of the industry, almost double that of the next competing firm.

Play Quizzes 4

World class franchise

Speaking Wednesday at a Sanford C. Bernstein Strategic Decisions Conference, Goldman Sachs Group Inc (NYSE:GS) Chief Operating Officer Gary Cohn painted a positive picture of the prodigious investment bank going forward. Cohn cited “continued leadership in a world clash franchise” as he noted the ability to adapt to industry trends, obtain greater “wallet share” of clients and benefit from developments such as the rise merger and acquisitions activity, where the firm was number one in announced and completed M&A, equity & equity-related underwriting and IPOs, he noted in prepared remarks.

How Value Investors Can Win With Tech And “Fallen” Growth Stocks

Valuation Present ValueMany value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More

Cohn announced with optimism that M&A activity was rising and the firm continued solid underwriting activity despite market uncertainty and a slowing improving macroeconomic environment where hedge funds are underperforming the S&P 500 (INDEXSP:.INX) year to date amidst muted client risk appetite..

Current market environment features abnormally low volatility

Cohn, like many professional traders, notes with interest the historically low volatility across a variety of asset classes that discourages hedging and delays opportunistic investing.  Volatility is impacted by low real yields, fewer central bank surprises and limited forward GDP visibility.  His presentation slides did not mention the impact quantitative easing has had on volatility reduction across a variety of markets.

Goldman Sachs’ strong diversification

A key to Goldman Sachs Group Inc (NYSE:GS)’s success is their diversification across a number of client types and strong management discipline.  The firm services institutional investors, hedge funds and sovereign governments providing over the counter SWAPs as risk management tools and providing various services to help organizations manage their market exposure and risk over a somewhat challenging market environment.  The firm has a growing presence with corporates and the average trade it executes exceeds $50,000 in value per trade.

In terms of its business revenue mix, the investment bank generates the highest percentage from commissions and fees, followed by equity client execution and securities services.

While growth has been steady, Goldman Sachs Group Inc (NYSE:GS) has reduced headcount by 10% since 2010 and continues to focus on the balance sheet and capital reserves.  Cohn touted the firm’s technology platform while noting that they are expanding into both high and low touch product lines while focusing on efficiency and protecting its market leading profit margins.

Considering various macro trends the bank will seek to capitalize on, Cohn looked to cross border activity in investment banking, a return to a supply and demand driven market model and in asset management a shift to professionally managed money and a defined contribution market environment. In investing and lending the company sees demand for growth capital.

See full report on “Average Goldman Sachs Client Invests $40 Million With Firm” in PDF format here via Goldman Sachs.

Updated on

Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com
Previous article BlackBerry Ltd’s OS 10.3 May Have Multitasking [REPORT]
Next article McDonald’s Corporation Unveils 3-year Total Cash Return Target

No posts to display