How dealmaking king Goldman Sachs aims to dominate another corner of Wall Street
HS 08/08/2025
Goldman Sachs has long been considered the king of Wall Street dealmaking. Now, the bank is increasing its focus on another target: managing money for wealthy clients and institutions. Investment banking services, like underwriting initial public offerings (IPO) and advising mergers and acquisitions (M & A), have long been Goldman’s bread and butter. In fact, the firm was ranked No. 1 in overall global M & A activity for the first seven months of 2025, capturing 32% of market share among its financial peers, according to LSEG data. Most recently, Goldman has had its hand in a number of high-profile initial public offerings, too, such as Nvidia chips-for-rent company CoreWeave , trading platform eToro , and fintech company Chime. But management sees a big opportunity in its much-smaller asset and wealth management (AWM) division. Speaking to CNBC, Marc Nachmann, Goldman’s global head of asset and wealth management, said the company has a plan to grow this business — which includes portfolio construction, risk management, financial planning and other investment services — and challenge its banking peers in a less-crowded corner of Wall Street. “There’s still an opportunity to take market share and be a winner in this game,” he said. Indeed, Goldman’s not alone in this pursuit. Morgan Stanley , for example, has been working for years to hit its goal of $10 trillion in total client assets across its wealth and investment management division, which was set under former CEO James Gorman in 2022 and continues under current CEO Ted Pick. The push for Goldman would also help to further diversify the firm’s revenue streams. Investment banking makes up more than two-thirds of overall sales, but these incomes can be volatile and cyclical. That was last seen in 2020 when the Covid-19 pandemic caused a huge disruption to Wall Street dealmaking, which the industry is still recovering from. In contrast, revenue from asset and wealth management services are often fee-based and less impacted by short-term market fluctuations. In a wide-ranging interview with Nachmann, we also talked about Goldman’s generative artificial intelligence ambitions, the regulatory backdrop under President Donald Trump , and Wall Street’s push into alternative assets, which the White House wants to allow into retirement accounts. This interview has been edited for clarity and length. A lot of Wall Street is focused on Goldman as a play on the rebound in investment banking, but I’m interested in looking into growth and expansion in areas outside of the GBM division, specifically your asset and wealth management businesses. How does AWM complement Goldman’s overall business mix? Nachmann: When you take it back to the big picture, one of the things that has helped tell our story better is that in the beginning of 2023 we had our investor day at the end of February. We reorganized the way we report and manage ourselves into these two big areas, right? So, you have GBM and AWM. GBM is the combination of the trading business and the investment banking business. I’d say it’s the long-established businesses. Both of these businesses are pretty concentrated when you think about the key players. When you think about both trading and banking between Goldman Sachs, JPMorgan , and Morgan Stanley, that’s a huge percentage of the market. And we’ve been a leader there for a long time. I’d also say overall GBM is a capital-intensive business, too, right? So, it requires a good amount of balance sheet. I think it’s a good return business, but it has some cyclicality in it. So, you see the capital markets activity, IPO calendars going up and down, M & A volumes going up and down, and trading volumes up and down. That’s a big 70% of our revenue from there. When you look at AWM, generally speaking, we have fee revenues that are sticky, durable, and generally speaking, good secular growth with both asset management and wealth. There’s less cyclicality. So, now you have less cyclical, less capital-intensive, more durable, sticky revenues, but it’s much more fragmented. And it’s not the same thing where you don’t have a Goldman, JPMorgan or Morgan Stanley who owns a huge proportion. There’s still an opportunity to take market share and be a winner in this game. I think we really simplified the firm into these two buckets. And given that AWM has this underlying secular growth, as well as the opportunity to continue to build more market share, it’s the growth part of the firm. I say that with all due respect to my colleagues in GBM. They of course want to grow too, but I’m just saying in terms of long-term growth, it’s really on the AWM side. Goldman Sachs CEO David Solomon emphasized during the conference call that Goldman is “particularly focused on thinking about ways to accelerate the asset and wealth management franchise.” Can you break down the firm’s strategy to grow this division in a more pragmatic and practical sense? Nachmann: In a big picture way, though, the AWM business grows with more headcounts because in wealth management, if you want to cover more clients, you got to have more advisors, right? These businesses grow with headcount. So, when David says we’re trying to do things to accelerate the growth, we’ve been allocating a good bit of human capital to AWM to allow the growth. That’s a big portion of it. I think the key to that on the wealth side is really two pieces. One is to continue to grow the advisor count, right? So, we watch that very carefully. We grow our advisor count consistently. One of the things we’ve done is we’re growing both in the U.S. and internationally. I’d say internationally we’re growing faster than in the U.S., but that’s because it’s off a lower base. We’ve been very focused on growing Europe and Asia at a faster advisor hiring than in the U.S., but all three regions are growing well. So, the strategy in some sense is to continue doing what you’re doing but doing it with more people. There’s a strong emphasis as well on focusing on continuing to build us out in international markets. Then the second thing on the wealth side, when you look at us as a wealth manager, we are only servicing the ultra-high-net-worth segment. That’s a $30 million account size and up. It makes us different from most of the other wealth managers amongst the public companies, and we’re sticking to that segment. Historically, our business has been super heavy on the fee revenues around advising our clients on how to do the asset allocation and how to invest their money. We have historically not been as active on the lending side, especially if you compare us to a JPMorgan. If you look at JPMorgan, more than 50% of their wealth management revenues come from lending. For us, it’s around 20% or so. We will never be at the extreme of where JPMorgan is because we want to continue to be a wealth manager in terms of giving advice on the asset side and on the investing side. But we think we can do more with our clients in helping them on the lending side. That’s another growth driver for us. In what way is Goldman trying to do that on the lending side? Nachmann: So, there’s two categories. There’s existing clients that have lending needs that we’ve historically not been very focused on. So, it’s doing more with existing clients on lending. And then I’d say there’s a large universe of clients where lending is a precursor to a wealth relationship, where lending is very important. There’s lots of wealthy people out there that are asset rich but liquidity-light. They have a lot locked up in their business. Let’s say you’re a hedge fund manager and all your money is in the hedge fund or you own a family business and you put most in that business. You can be very wealthy, but you don’t necessarily have a ton of liquidity to just do general investing into the public markets or private markets. Those clients tend to want to have some lending facilities to give them liquidity or to allow them to invest in other things. So, whoever gives them the lending becomes their preferred partner to do their wealth management. And so given that we historically haven’t been very focused on lending, those clients kind of selected themselves out and really worked more with the JPMorgans. So by more proactively focusing on the lending side, we will start doing lending with these clients. These clients over time will do all their wealth management business with us. It’s a combination of doing it with more existing clients and opening up to a whole host of new clients that we haven’t approached as well as we could have. Goldman announced a private credit product for retirement plans late last month. Can you tell me the origin of this offering and what the firm hopes to achieve by rolling it out? Nachmann: So, the way to think about private assets is that they are illiquid, and that is a fundamental thing. I am nervous about people who run around out there in the world – other asset managers who talk about having illiquid assets and describing them in vehicles that look like they’re liquid. By definition, it doesn’t work like that because private assets are illiquid. That’s the whole point of them. Now, part of the reason private assets have outperformed historically is because you’re basically getting a liquidity premium. If you believe asset prices in general are efficient, there has to be a reason why private assets have outperformed. One of the reasons is because you actually get paid for the fact that they are illiquid and you can’t take your money out all the time. Now, another reason why you can make more money in private markets sometimes is because you can actually actively manage them. If you’re a private equity firm and you buy a company, you can now make changes to the company. If you’re good at it, you can actually generate excess returns because you manage this company better. That’s much harder to do than buying a stock in the public market because you, as an individual shareholder, cannot really have as much impact. So, when you think about the democratization of alternatives that everybody talks about, what is a good way to do this? Well, one really good way to do this is in the retirement channel. Think about a 401(k). When you’re 24 years old and you graduate from college and you start your first job and you start putting your first real dollars into a 401(k) fund, those are exactly the dollars that you should put into something that pays you for being locked up for a period of time, for being illiquid. Because at 24, you’re not going to access that liquidity for decades. So, I think the retirement channel is a really interesting channel to get alternatives exposure because the fact that alternative assets are illiquid doesn’t really hurt. And so that’s why we’re very focused on launching something into the retirement channel, specifically into target date funds. One of the big benefits is these target dates all have glide paths: they start with higher equity contributions when you’re young, and as you get closer to retirement, there’s more fixed income so that when you then go into retirement, you have a fixed income stream of earnings. Does this indicate an even bigger push for Goldman moving forward into alts and other private assets? Nachmann: I think we’re a big alts player overall. We’ve stayed top five in terms of assets on the alts side. It is a bigger push that we’re making consistent with what the industry is making though into this democratization of these alt products. It’s one of the things we’re very good at because we have this ultra-high net worth business. We have a wealth system that for many decades has been investing in alternatives. We’ve had, what we call it, two-legged individuals. These are individuals who’ve invested in alternatives versus kinds of institutions. And so we have a lot of experience with individuals investing in alternatives already. I ncorporating alts into a retirement plan probably isn’t an exceptionally new idea. I’m sure people have wanted to do it for a while. The only difference now is that we have an administration that many feel will loosen up the rules. So, does the recent regulatory environment have anything to do with your decision? Nachmann: In some sense, yes. You need the right regulatory environment to be able to have alternatives in the retirement plans. As you said, this has made sense for a while. In fact, when you think about it, most pension funds, which are really kind of defined benefit programs, have big alternatives exposure. If you look at all the state pension funds, they are retirement systems. It’s just a defined benefit versus a defined contribution. That has been a long-standing way of doing things. It’s just that individuals in defined-contribution in their 401(k) plans have not been able to do it. A big reason for that is the regulation around it, and so I think it makes sense that the administration is now changing the regulation because individuals in their defined contribution plans should be able to have access to the same things that the big pension funds have. Goldman unveiled a firm-wide generative AI tool assistant earlier this year. How is this technology being utilized specifically in the AWM division? Nachmann : We are using it more and more. There are opportunities on the efficiency side, where generative AI can do things much faster or more efficiently than we’ve done historically. We’ve got a whole bunch of use cases that we’re working on. A lot of them are at various stages. They look promising. Within the next year or two, that will really accelerate and people will understand the results much better. Can you give me an example of how currently one of Goldman’s advisors may be using this tool on a day-to-day basis? Nachmann: On the wealth side, if you’re an advisor and you have a bunch of clients, you can use AI to do runaway screens through your clients’ portfolios. Is your asset allocation mixed in the right place as markets change? Based on what’s happening to various stock prices, are you overallocated to specific stocks? Are there things missing in your asset allocation that you should be incorporating? So, there’s a lot that goes into productivity enhancement. (Jim Cramer’s Charitable Trust is long GS, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
