NEW YORK : Goldman Sachs Group Inc's asset management arm will significantly reduce the $59 billion of alternative investments that weighed on the bank's earnings, an executive told Reuters.
Goldman had a dismal fourth quarter, missing Wall Street profit targets by a wide margin. Like other banks struggling as company dealmaking stalls, Goldman is letting go of more than 3,000 employees in its biggest round of job cuts since the 2008 financial crisis. The $59 billion of alternative investments held on the balance sheet fell from $68 billion a year earlier, the results showed. The positions included $15 billion in equity investments, $19 billion in loans and $12 billion in debt securities, alongside other investments.
"Private credit is interesting to people because the returns available are attractive," he said."Investors like the idea of owning something a little more defensive but high yielding in the current economic environment."