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Goldman Sachs has agreed to sell one of its private fund management units as Chief Executive David Solomon continues a disruptive effort at consumer banking.
The unit, which has about 200 employees, is sold to Creative Planning, Investment and Retirement Advisors. The division offers financial planning to affluent, non-ultra-wealthy clients, serving individuals with accounts ranging from hundreds of thousands to millions of dollars.
Goldman did not disclose terms of the transaction, which it expects to close in the fourth quarter of the year, but said it would book a gain on the sale. The Financial Times had previously reported that Goldman was “evaluating alternatives” for the unit, which includes its registered investment adviser operations and oversees about $29bn in assets. The deal represents 1 percent of Goldman’s overall $2.7tn assets under management.
Shares of Goldman rose more than 1 percent on Monday.
Goldman plans to continue offering financial planning services to its wealthiest clients, with accounts averaging $60mn. For the less affluent, Goldman said it will continue to offer funds and other investment products, which will be sold through outside financial advisers, including Creative Planning.
“A key aspect of the transaction is that it allows us to focus on a very high net worth business with a long-standing proven track record,” said Mark Nachman, head of wealth management at Goldman Sachs. “We see opportunities for continued growth both domestically and internationally.”
Creative Planning, a wealth management firm with $245bn in assets, is run by chief executive Peter Malluk. The Path: Accelerating Your Journey to Financial Freedom.
Malluk social media platform X previously uses Twitter to advise his more than 37,000 followers. He has co-authored books with lifestyle coach Tony Robbins, who previously served as head of investor psychology at Creative Planning before leaving in 2019.
The business, which Goldman is selling, was acquired by California-based investment adviser United Capital in 2019 for $750 million. The unit grew 20 percent under Goldman’s ownership, but was never integrated with the firm’s other asset management unit.
A second treaty made under Solomon was annulled. This year the bank put online lending business GreenSky, which it acquired in 2021, up for sale, although a deal has yet to be announced.
The losses pushed into mass-market banking have added to the pressure on Solomon, who faces the most challenging period of his five-year tenure as chairman. He has so far retained the support of the Wall Street bank’s directors and some of its key shareholders, but faces internal backlash over his blunt leadership style and critical messaging.
Additional reporting by Josh Franklin
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