by Saeed Azhar
NEW YORK (Reuters) – The asset management arm of Goldman Sachs will significantly cut its alternative investments by about $59 billion which are weighing on the bank’s performance, an executive told Reuters.
The American banking group plans to divest its positions over the next few years and replace some of its alternative funds with external capital, said Julian Salisbury, chief investment officer of asset and wealth management at Goldman Sachs, in an interview with Reuters.
“I expect to see a significant decline from current levels,” he said. “It will not fall to zero because we will continue to invest in and around the funds”.
Goldman Sachs had a difficult fourth quarter, with performance well below market expectations. Like its counterparts, the bank is suffering from the slowdown in mergers and acquisitions, which led it to cut 3,000 jobs, its biggest layoff plan since the 2008 financial crisis.
The group will provide further details of its asset plan during an investor day scheduled for February 28.
Alternative assets can include private equity or real estate, as opposed to traditional investments such as stocks and bonds.
(Reportage Saeed Azhar; Blandine Hénault for the French version, edited by Nicolas Delame)
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