The new unit’s exact structure will be determined in the next few months and it will have about US$140 billion of assets – almost the size of KKR & Co. Inc. and about a third the size of Blackstone Group LP, the newspaper said. The unit will also raise funds, it added.
Goldman Sachs is trying to increase the kind of steady, income-generating business that investors like, the paper said, in a bid to boost its share price. The move comes as its traditional investment banking and trading business aren’t expanding, compared with private investing, the paper said.
While the bank has been in the private-equity business since the 1980s and had expanded those operations in the 2000s, it’s now looking at raising funds from investors to earn fees from managing those assets, the newspaper said.
A Goldman Sachs spokesperson didn’t immediately return a phone call after regular office hours.
Goldman stock has fallen 18% in the past year, compared with the 1.3% decline in the Standard and Poor’s 500 Financials Index. The broader S&P 500 Index climbed 3.8%.