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Money Management

GSAM hits record for quarter

Goldman Sachs reported $1.513 trillion in assets under supervision for its Goldman Sachs Asset Management and wealth management businesses — a record — in its earnings report Tuesday.

Assets under supervision grew 1%, or $15 billion, from the previous quarter and were up 7.6% from a year earlier.

Ramon Martin "Marty" Chavez, executive vice president and chief financial officer, during the earnings call attributed the growth in assets in the quarter to strong inflows in GSAM's long-term and liquid asset classes, .

Net investment management inflows were $18 billion in the quarter ended June 30, compared to net inflows of $8 billion for the previous quarter and net inflows of $16 billion for the second quarter of 2017.

Net market depreciation for GSAM's investment strategies was $3 billion in the quarter ended June 30 and $4 billion in the prior quarter, in contrast to the second quarter 2017 when net market appreciation was $17 billion.

GSAM reported positive net inflows in all asset classes in the quarter ended June 30.

Net inflows into equity strategies were $2 billion in the second quarter, compared to $5 billion in both the previous quarter and the second quarter of 2017.

Fixed-income net inflows were $3 billion in the three months ended June 30, $9 billion in the prior quarter and $7 billion a year earlier.

Liquid strategies experienced a $10 billion surge of net inflows, compared to net outflows of $5 billion and $9 billion in the first quarter this year and second quarter of 2017, respectively.

Net inflows into alternative strategies were $3 billion in the quarter ended June 30 vs. a net outflow of $1 billion in the March 31 quarter and net inflow of $13 billion a year earlier.

By asset class, Goldman Sachs reported equity assets of $329 billion for the most recent quarter, up 1.8% from the prior quarter and up 3.6% from a year earlier.

Fixed-income assets totaled $663 billion, down a slight 0.75% from the first quarter and up 4.6% from the second quarter of 2017.

Assets managed in liquid strategies were $350 billion in the three months ended June 30, up 2.9% over the prior quarter and up 11.5% compared to a year earlier.

Assets managed by GSAM in various alternative investment strategies were $171 billion as of June 30, an increase of 1.8% from the quarter ended March 31 and up 3.6% in the 12-month period.

Goldman Sachs reported net revenue of $1.843 billion — a quarterly record — from its investment management business in the three-month period ended June 30, up 4.1% from the previous quarter and up 20.5% for the year.

In the earnings statement, the firm noted the increase in net revenue for the year ended June 30 was "primarily due to significantly higher incentive fees."

Incentive fees in the quarter ended June 30 were $316 million, up 48.4% from the previous quarter and 290.1% from a year earlier.

Mr. Chavez said on the call that the growth in GSAM's incentive fees was the result of "solid contributions" from both the asset management and private wealth management units.

Selling assets from the firm's private equity funds and taking profits also helped bump up incentive fees, Mr. Chavez said. He singled out GS Vintage Fund V, a private equity secondary fund, which closed in 2009 with $5.5 billion, as being responsible for a large portion of the overall gain in performance fees.

Investment management and other fees were $1.35 billion for the quarter ended June 30, the same as the quarter ended March 31, but up 5.5% from a year earlier.