Goldman Sachs Eyes $70B Revenue Base as Asset, Wealth Growth Accelerates

Key Points

• Goldman Sachs expects its revenue base to reach roughly $70 billion this year, up from the mid-$30 billion range when its strategic plan began in 2018–19, supported by greater diversification and operating leverage.
• Asset & Wealth Management is exceeding its targeted high-single-digit growth rate, overseeing about $4 trillion in assets and targeting 30% margins and high-teen returns. Acquisitions and partnerships are expanding its alternatives, ETF, retirement and real estate capabilities.
• Goldman expects alternatives fundraising above $125 billion this year and sees major financing opportunities from AI infrastructure investment, while near-term results may face higher expenses, softer FICC activity and a muted investments line.

David Solomon, chairman and chief executive officer of The Goldman Sachs Group NYSE: GS, said the firm is focused on expanding earnings, improving operating efficiency and building a more durable revenue base as it pursues growth across Global Banking & Markets and Asset & Wealth Management.

Speaking at the company’s Global Financial Services Conference, Solomon said Goldman Sachs has grown its revenue base from the mid-$30 billion range when its current strategic plan was developed in 2018 and 2019 to an expected level in the $70 billion range this year. He said the company has also created operating leverage and broadened its business mix.

“We have a much broader, more diversified, more durable business,” Solomon said. While results may fluctuate with market conditions, he said Goldman expects its revenue base to remain structurally higher through market cycles than it was a decade or more ago.

Growth priorities in two core businesses

Solomon identified Global Banking & Markets and Asset & Wealth Management as Goldman Sachs’ two major growth engines. He said the company sees opportunities to grow its Banking & Markets franchise, gain additional market share and use technology to operate more efficiently even at unchanged activity levels.

In Asset & Wealth Management, Solomon said Goldman has stated that it could grow at a high-single-digit rate but is currently exceeding that pace. The company is targeting 30% margins and high-teen returns in the unit, he said.

The segment supervises approximately $4 trillion in assets, including $2 trillion of wealth assets, according to Solomon. He said the platform combines Goldman’s former merchant banking, public-side asset management, money-market liquidity, fund-of-funds and wealth-management businesses.

Solomon said Goldman’s breadth across liquidity, fixed income, public equities and alternatives differentiates the platform. He also cited demand from ultra-high-net-worth clients, saying the firm expects secular growth in global wealth and in the number of ultra-wealthy individuals.

Acquisitions target product gaps and talent

Goldman has completed four acquisitions and formed a partnership with T. Rowe Price in Asset & Wealth Management, Solomon said. He characterized the moves as meaningful but not individually significant, designed to fill platform gaps, accelerate growth and bring entrepreneurial talent into the firm.

The T. Rowe Price partnership is intended to expand Goldman’s access to retirement distribution, where Solomon expects alternatives participation to increase over time. Goldman’s acquisition of Industry Ventures adds early-stage venture capabilities and a network that could help the firm see investment opportunities earlier, he said.

Solomon also cited Innovator Capital Management and NEOS as additions that strengthened Goldman’s active exchange-traded fund platform. He said Goldman had not previously ranked among the 50 largest ETF providers but now has a top-six-to-eight position in active ETFs, depending on the measurement used.

Goldman’s most recent triple-net-lease real estate acquisition was intended to broaden the firm’s real estate capabilities, an area where Solomon said the company has not yet achieved the scale it seeks. He said additional small acquisitions are possible if the firm finds teams and capabilities that fit its strategy.

Alternatives, financing and AI opportunity

Solomon said Goldman has about $700 billion in alternative assets and expects to raise more than $125 billion in alternatives this year, above its previously communicated annual range of $75 billion to $100 billion. He said the firm is seeing particular investor interest in credit, including institutional credit and structured products.

He attributed alternatives fundraising in part to Goldman’s performance record and its ability to customize investment offerings for large institutional investors rather than simply market individual funds.

On financing, Solomon said recent record equities and fixed-income, currency and commodities financing revenue reflected favorable market activity, though he cautioned growth would not follow a straight line. Financing demand is tied to market activity and market capitalization, he said, while Goldman’s scale could support pricing power over time.

Solomon said artificial intelligence-related infrastructure investment is creating financing opportunities, although AI does not account for all financing activity at the firm. If projected compute buildouts require $1 trillion over the next five years, “there’s going to be a lot of financing to do that,” he said.

He said Goldman can participate as an asset manager, adviser, distributor and underwriter, while remaining selective on credit quality, collateral and transaction structures. Solomon said the firm is monitoring cases where structured financings may receive investment-grade ratings despite risks that differ from traditional investment-grade exposure.

Near-term commentary and capital deployment

For the near term, Solomon said equities activity remained strong, while FICC activity was softer relative to equities but still at a good level. He told investors to expect a more muted third quarter for the firm’s investments line after significant activity in the second quarter.

He also said non-compensation operating expenses should rise by more than $500 million sequentially, reflecting higher transaction expenses, accelerated technology investment and a decision to pull forward several years of charitable giving in a tax-efficient manner. Loan provisions are expected to be slightly higher than in the comparable quarter a year earlier due to a few idiosyncratic items, though Solomon said the overall loan portfolio was performing well.

Solomon said Goldman’s first capital-allocation priority is deploying capital in client-serving businesses that can generate accretive returns. If those opportunities are unavailable, he said the firm intends to return capital to shareholders through dividends and other distributions. He noted that Goldman has raised its quarterly dividend from $0.80 to $2.50.

Looking further ahead, Solomon said technology could enable Goldman to redesign processes, automate operations, improve margins and create capacity for additional growth investment. He said the company remains confident in its ability to grow earnings over a five- to 10-year period, while acknowledging that market conditions will continue to fluctuate.

About The Goldman Sachs Group (NYSE:GS)

The Goldman Sachs Group, Inc NYSE: GS is a global financial services company that provides investment banking, securities, asset management and wealth management services to corporations, financial institutions, governments and individuals. The company is headquartered in New York City and serves clients across North America, Europe, Asia-Pacific and other international markets.

Through its Global Banking & Markets segment, Goldman Sachs advises clients on mergers and acquisitions, capital raising, restructuring and other strategic transactions.

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