Goldman Sachs sees revenue hit in Q2, but AUM grows with NN acquisition

Goldman Sachs Asset Management reported assets under supervision of $1.82 trillion as of June 30, a 10.1% increase from three months earlier and an 11.7% jump from the year-ago second quarter, boosted by the acquisition in mid-April of Dutch asset manager NN Investment Partners.

Firmwide assets under supervision reached a record $2.5 trillion at the end of the second quarter, up 4.2% from the end of the first quarter and an 8.2% increase from a year-ago, Goldman Sachs said in its earnings release on Monday.

Firmwide AUS increased $101 billion during the second quarter, including inflows of $305 billion from the April 11 acquisition of NN Investment Partners, Goldman noted in the release.

Firmwide AUS "covers AUS managed by GSAM, inclusive of third-party AUS managed by the asset management division as well as AUS managed for the firm's wealth management clients," a GSAM spokeswoman said by email.

Goldman Sachs' asset management business reported net revenue of $1.08 billion in the second quarter, a 99% surge from the first quarter, but a 79% plunge from the second quarter of 2021, the release said.

Goldman Sachs said in the release that the year-over-year decline in revenues "reflected net losses in equity investments and significantly lower net revenues in lending and debt investments, partially offset by significantly higher management and other fees."

The firm further noted that "macroeconomic concerns and the prolonged war in Ukraine continued to contribute to the volatility in global equity prices and wider credit spreads." As a result, Goldman added, "net losses in equity investments reflected significant mark-to-market net losses from investments in public equities and significantly lower net gains from investments in private equities, compared with a strong prior year period."

In an earnings call with analysts on Monday, Goldman Sachs CEO David M. Solomon said "there is no question that the market environment has gotten more complicated and a combination of macroeconomic conditions and geopolitics is having a material impact on asset prices, market activity and confidence."

Mr. Solomon also said in the call that inflation is "deeply entrenched" in the economy and "what's unusual about this particular period is both demand and supply are being affected by exogenous events, namely the pandemic and the war in Ukraine."

Mr. Solomon added: "We are seeing shifts in monetary policy and those shifts will continue to tighten economic conditions. I expect there is going to be more volatility and there is going to be more uncertainty."