Goldman Sachs assets slip 2.2% in quarter

Goldman Sachs Group reported $1.818 trillion in assets under supervision for its asset management and consumer and wealth management businesses as of March 31, down 2.2% from three months earlier and up 13.7% from a year earlier, the company's first-quarter earnings report issued Wednesday said.

Firmwide assets under supervision decreased by $41 billion during the quarter, despite net inflows in long-term products and liquidity strategies, according to a Goldman Sachs earnings presentation. Gains during the three months ended March 31 were offset by net market depreciation of $114 billion, primarily in equity assets.

During the first quarter, the firm reported $1 billion in long-term net inflows, compared to $2 billion in long-term net inflows in the fourth quarter and $20 billion in long-term net inflows in the year-earlier quarter.

Net flows into liquidity products were $72 billion during the three months ended March 31. In the fourth quarter, liquidity products saw $58 billion in net inflows, compared to $22 billion in net outflows during the first quarter of 2019.

Goldman's asset management revenues took a significant hit during the first quarter.

Notably, asset management was the only business unit to report negative net revenues during the period.

During the three months ended March 31, the asset management business had $96 million in negative net revenues, in comparison to $3 billion in net revenues in the previous quarter and $1.8 billion in net revenues during the first quarter of 2019.

Goldman reported firmwide net revenues of $8.7 billion during the first quarter, which was 12% lower than the fourth quarter and 1% lower than the first quarter of 2019.

Losses in the asset management business were due to the significant decline in the fair value of Goldman's long-term investments in equity, debt securities and loans, Chief Financial Officer Stephen Scherr said during the earnings call.

"We also took a material provision for credit losses in the quarter," Mr. Scherr said.

For the firm, the first quarter "proved to be two very different operating periods, with a solid January and February, followed by a challenging and volatile backdrop in March," David M. Solomon, chairman and chief executive officer, said during the earnings call, referencing the impact of the coronavirus pandemic.

"We are grappling with an unprecedented global crisis that is putting extraordinary pressure on all of society — on family, on small business owners, on large companies, on not-for-profit organizations, on governments and economies around the world, and, of course, on the health care system," Mr. Solomon said.

In response to the spread of the coronavirus, Mr. Solomon noted that 98% of Goldman's global employees have been working remotely over the past month, while handling two to three times the amount of trading volumes "to maintain very high levels of engagement across all our stakeholders, from corporations and institutions to individuals."