On May 16, 2019 Goldman Sachs announced that they would be acquiring United Capital for $750 million. This is the largest purchase Goldman Sachs has made since their acquisition of Spear, Leeds & Kellogg in 2000 for $6.5 billion. The deal with United Capital is expected to close in the third quarter of 2019.
United Capital is a boutique firm that has $25 billion in assets under management, more than 220 financial advisors, and around 22,000 clients. This acquisition will give Goldman a larger footprint in the wealth management field and access to United Capital’s state of the art technology. Goldman Sachs has a goal to diversify away from trading, a troubled part of the bank in recent years. With banks seeing a plunge in fixed income, commodities and currencies during the first quarter Goldman Sachs led the pack with a steep 11% decrease in stock prices. With trading revenue being expected to shrink again during the second quarter due to slower trading activity, the recent acquisition will give Goldman Sachs a needed boost to move away from trading market and toward wealth management.
With the acquisition of United Capital, Joe Duran, CEO of United Capital, will join Goldman Sachs as well as its employees and 220 financial advisors. Beyond adding cliental, Goldman wanted to acquire United Capital to utilize their technology. United Capital’s advisors use the digital platform FinLife CX to grow businesses, customize portfolios, and stay connected with clients. Goldman Sachs wants to utilize this technology to improve their platforms for private wealth management and Ayco businesses.
Ayco caters to corporate executives and employees, providing financial advice and investment management tools to more than 400 companies with 60 of them being Fortune 100 companies. With Goldman Sachs’ wealth management business being comprised of private wealth management and Ayco that hold nearly $500 billion of assets under management. They are a global leader in providing comprehensive advice and investment solutions to high net worth individuals, families, and endowments. United Capital will enhance Goldman’s abilities to cover a broad range of clients in Ayco’s growing corporate client base with financial planning solutions through advisor-led, tech-enabled platform with considerable scale and geographic footprint.
These efforts will also complement the digitally- empowered customer platform for individuals from Marcus by Goldman Sachs. Goldman Sachs sought to improve their technology for regular people and their ability to manage their money with their acquiring of Clarity Money, the personal finance app which uses machine learning to create an easily accessible platform for all who desire to manage their money.
Overall, this is a big stepping stone for the wealth management field and will bring a lot of publicity to the market through the news, journals, and other media sources talking about the massive acquisition for Goldman Sachs.
Goldman Sachs:
Is a leading global investment banking, securities and investment management firm that produces a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, and individuals. Goldman Sachs was founded in 1869 and hold their headquarters in New York and maintains offices in all other major financial centers around the world.
United Capital:
United Capital Financial Partners, Inc. and its consulting affiliate, is an independent financial life management firm, ranked #2 in the Barron’s 2018 list of Top 40 Independent Financial Advisors. United Capital is a registered investment advisor offering clients objective advice and an open architecture platform that enables a wide array of investment management solutions tailored specifically to client needs.