Goldman Sachs Acquires United Capital to Boost Wealth Management Business

Goldman pays $750 Mn to acquire United Capital in its biggest deal in close to two decades.

Goldman Sachs, an American multinational investment bank and financial services company, has announced the $750 Mn acquisition of United Capital, a national financial management firm based in the US. The acquisition is expected to help Goldman to bolster its wealth management business. According to sources, it is probably the largest purchase that Goldman has made in almost a couple of decades. Sources say that the deal is part of the company’s efforts to slowly but steadily push into the wealth management business so as to offset the instability experienced in its trading arm.

“Our company has a leading wealth management franchise, driven by its preeminent Ayco and Private Wealth Management offerings, which as it executes its long-term strategy for providing clients with solutions across the wealth spectrum will serve as a cornerstone of our business. This strategy will be helped accelerated by United Capital broadening our reach, allowing more number of clients to access our investment and intellectual capital capabilities,” said Goldman’s Chairman and CEO, David Solomon (source).

United Capital’s founder, employees, and financial advisors will join Goldman

Currently, Goldman takes care of multi-billion-dollar worth assets under management (AUM) across Ayco, its subsidiary that provides financial counselling to employees, and its Private Wealth Management unit. It has also planned to ensure expansion across the wealth spectrum. With the acquisition of United Capital, it will gain access to state-of-the-art technology, besides enjoying an extensive footprint in the wealth management industry. United Capital has over 22,000 clients and $25 billion in AUM. According to the acquisition deal, Goldman will welcome United Capital’s over 220 financial advisors and also its employees across the US. Moreover, it will see Joe Duran, Founder and CEO of United Capital, joining its company as part of the deal.

In 2000, Goldman announced the joining of Spear, Leeds & Kellogg, a US capital market company, in a $6.5 Bn deal. According to Goldman’s press release, the combination of the two companies positions Goldman at the center of order flow and price discovery and at the forefront of advanced technology with a largely expanded client base.