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Money Management

Goldman Sachs assets under supervision up 4% in quarter, 7% for year

Goldman Sachs reported $1.6 trillion in assets under supervision as of March 31.

Goldman Sachs Group (GS) reported $1.6 trillion in assets under supervision for its Goldman Sachs Asset Management and wealth management businesses as of March 31, up 4% from three months earlier and up 7% from a year earlier, said its first-quarter earnings report issued Monday.

The firm's increase in AUS was driven by $20 billion of net inflows to fixed-income strategies and $59 billion of market appreciation, which were partially offset by liquidity product outflows, said Stephen Scherr, chief financial officer, said during an earnings call.

The first quarter saw $20 billion in long-term net inflows, compared to long-term net inflows of $3 billion for the previous quarter. In the first quarter of 2018, Goldman Sachs saw net inflows of $13 billion.

For the first quarter, fixed income saw net inflows of $20 billion; equities saw net outflows of $1 billion and alternative strategies had $1 billion in net inflows.

Separately, liquidity strategies saw net outflows of $22 billion for the quarter.

By asset class, Goldman Sachs reported $717 billion in fixed-income strategies as of March 31, up 5.9% from three months earlier and up 7.3% from 12 months earlier. Equity products had $335 billion in assets, up 11.3% from Dec. 31 and up 4% from March 31, 2018; liquidity had $375 billion, down 5.5% from three months prior, and up 10.3% from a year earlier. Alternative assets were $172 billion, up 3% from Dec. 31, and up 2.4% year-over-year.

Net revenues in investment management for the first quarter were $1.56 billion, 9% lower than the previous quarter and 12% lower than the first quarter of 2018.

The decrease in net revenues compared with the first quarter of 2018 was due to significantly lower incentive fees and lower transaction revenues, the earnings report said.

Investment management and other fees were $1.3 billion for the quarter ended March 31, down 2% from the previous quarter and down 1% from the year-earlier quarter 2018.

Under a companywide revenue expansion plan, Goldman Sachs is moving to expand its product offerings for Goldman Sachs Asset Management and its private wealth management businesses, Mr. Scherr said during the Monday earnings call.

As such, Goldman will aim to grow its advisory, outsourced CIO and exchange-traded fund products, Mr. Scherr said.

In November, Goldman announced that it was acquiring Rocaton Investment Advisors in a bid to expand its advisory and discretionary services for institutional clients. The acquisition of Rocaton, which had more than $600 billion in AUS as of Sept. 30, is expected to be completed in the first half of this year.

Within its investment management business, Goldman Sachs will also aim to increase its alternative assets, which currently represent 11% of Goldman's AUS.

"Alternatives is a key focus where client demand remains very strong," Mr. Scherr said. "With over $1.5 trillion of capital raised industrywide in the past five years. We currently have over $170 billion in alternative assets under supervision, and plan to significantly increase fundraising in the months and years ahead."