Goldman Sachs said its wealthy clients are turning to the bank for more than investment advice and portfolio management.
"Increasingly, they're looking for us also to provide financing,'' Chief Financial Officer Denis Coleman said Tuesday during the company's earnings call, adding, "we continue to see good opportunities particularly across the wealth management segment."
Banking executives are catering to high net worth clients whose paper wealth has fallen — and in some cases, evaporated — as rising interest rates have pushed the S&P 500 down more than 20% this year. Goldman issued several margin calls on Peloton co-founder John Foley over the past year as the exercise equipment maker's stock slumped, The Wall Street Journal reported last week. He had borrowed funds against his Peloton shares, which are down almost 80% year to date.
Over at Morgan Stanley, CEO James Gorman said last week that private companies were valued at "sporty levels" when rates were near zero and founders are struggling to come to terms with lower valuations in today's markets.
Long known for its investment banking and trading operations, the Wall Street bank is focusing on its wealth unit and tech ambitions.
"That's hard to accept as an entrepreneur," Gorman said. "It's their baby and they want to believe that it's what it was at the peak, and maybe it was overvalued at the peak."
While Goldman's wealth management revenue was relatively flat in the third quarter from a year earlier, private banking and lending revenue increased 35% to $395 million, driven by higher loan and deposit balances, according to a company
