Getting the Balance Sheet OutNarrow moat

Goldman Sachs (GS) — moat facet

Goldman has sold nearly $60 billion of its own private stakes to turn its fund business into a fee business.

Asset & Wealth Management used to be as much an investor of Goldman's own money as a manager of clients'. The firm has spent six years undoing that. Historical principal investments were reduced by about $57.5 billion since 2019 to $6 billion in 2025, and by $3.4 billion during 2025 alone, from $9.4 billion12.

Firmwide more durable revenues ($bn)12.2201926.32025Goldman Sachs Q4 2025 earnings presentation; management fees plus private banking and lending
Durable revenues more than doubled.

The effect shows in the segment's revenue mix. The investments line, gains and income on the firm's own stakes, was $1,988 million in 2023, $2,627 million in 2024 and $1,305 million in 20253. Management fees and private banking, which the firm calls more durable revenues, have grown instead: firmwide more durable revenues rose from $12.2 billion in 2019 to $26.3 billion in 20254.

Selling the stakes matters for two reasons. The investments line is lumpy: in 2021 it helped make Asset & Wealth Management revenue $21,965 million on the old basis5, and in 2023 commercial real estate impairments of $1.46 billion dragged on it6. And those stakes tie up capital that earns less than fee businesses do.

The drag is still visible. Asset & Wealth Management return on equity was 12.5% in 2025, including about 2.3 percentage points of reduction from the historical investments and an FDIC special assessment7. Without that, it would have been near 15%8.

The firm puts the reduction at 91%9. The investments line, which used to swing the segment, earned $180 million in the first quarter of 2026 and $441 million in the second10, still enough to move a quarter but no longer enough to decide a year.

What remains is $6 billion. Once it is gone the investments line should fall below $1 billion a year and segment return on equity should rise toward the high-teens target; if neither happens, the clean-up bought less than promised.

Moat trajectory: Widening

Historical principal investments down ~$57.5bn since 2019, to $6bn.

The number that tests this moat
Reported
Asset & Wealth Management return on equity, latest quarter
13.8% (Q2 2026) vs 12.5% for 2025

How much of the fee business shows through once the old stakes go; progress toward high teens would confirm the clean-up worked.

Source: Goldman Sachs Form 10-Q, Q2 2026 ↗
⚠ Threats to the moat
⚠ THREAT 01
Buyers May Not Bid
Goldman's last $6 billion of old private stakes will sell only if buyers bid at acceptable prices.
References
  1. ReportedHistorical principal investments were reduced by about $57.5 billion since 2019 to $6 billion in 2025, and by $3.4 billion during 2025 alone, from $9.4 billion.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Asset & Wealth Management: alternatives fundraising, fees, wealth, mandates and historical principal investments. — FY2025 · publ. 15 January 2026 · source ↗
  2. Moat Explorer calcHistorical principal investments were reduced by about $57.5 billion since 2019 to $6 billion in 2025, and by $3.4 billion during 2025 alone, from $9.4 billion.
    Moat Explorer calculation from Goldman Sachs' reported figures ($ millions unless stated; calendar years). Growth: net revenues 2025 58,283 / 53,512 - 1 = 8.9%, about 9%; 2022 47,365 / 59,339 - 1 = -20.2%; net earnings 2022 11,261 / 21,635 - 1 = -47.9%, nearly half; pre-tax earnings 21,852 / 10,739 = 2.03 times, about double; compensation 18,906 / 16,706 - 1 = 13.2%; total operating expenses 37,544 / 33,767 - 1 = 11.2%; preferred dividends 876 / 751 - 1 = 16.6%; CEO pay 47 / 39 - 1 = 20.5%; equities 16,535 / 11,549 - 1 = 43.2%; FICC 14,522 / 12,150 - 1 = 19.5%; FICC intermediation 10,271 / 9,318 - 1 = 10.2%; FICC financing 4,251 / 2,832 - 1 = 50.1%; Global Banking & Markets 41,453 / 29,994 - 1 = 38.2%; GBM pre-tax 17,574 / 11,000 - 1 = 59.8%; advisory 4,726 / 3,299 - 1 = 43.3%; underwriting (1,784 + 2,829) / (1,153 + 1,763) = 4,613 / 2,916 - 1 = 58.2%; investment banking fees 9,339 / 6,215 - 1 = 50.3%; 9,339 - 6,215 = 3,124, about $3.1 billion; Q2 2026 pace 3,395 x 4 = 13,580, 13,580 / 9,339 = 1.45; financing 11.45 / 6.03 = 1.90, close to double; intermediation best/worst 19.6 / 15.8 = 1.24; equity underwriting Q2 985 / 428 - 1 = 130%; H1 2026 equities 12,742 / 8,493 - 1 = 50%. Assets under supervision: 4,041 / 3,606 - 1 = 12.1% (six months); 3,606 / 3,137 - 1 = 15.0%; Q2 2026 rise 4,041 - 3,650 = 391 = inflows 230 + appreciation 161; management and other fees 11,538 / 10,415 - 1 = 10.8%; historical principal investments 9.4 - 6.0 = 3.4 billion; alternatives target 750 - 459 = 291 billion, 291 / 4.5 = 64.7, about 65 a year; 291 x 0.58% = 1.69 billion, about 1.7 billion; Shell mandate 40 / 4,041 = 1.0%; AWM ROE 12.5 + 2.3 = 14.8, near 15%. Shares of revenue: GBM 15,520 / 20,338 = 76.3% (Q2 2026), 41,453 / 58,283 = 71.1% (2025), 29,994 / 46,254 = 64.8% (2023); AWM 16,679 / 58,283 = 28.6% (2025), 16,316 / 53,512 = 30.5% (2024), 14,202 / 46,254 = 30.7% (2023), 4,597 / 20,338 = 22.6% (Q2 2026); equities 7,416 / 15,520 = 47.8% of the segment in Q2 2026; advisory 4,726 / 58,283 = 8.1%; GBM pre-tax 17,574 / 21,852 = 80.4%; FICC plus equities 14,522 + 16,535 = 31,057; Q2 2026 financing 1,216 + 3,259 = 4,475; durable revenues 26.3 / 58.283 = 45.1% (2025), 12.2 / 36.546 = 33.4% (2019); GBM assets 1,582,670 / 1,809,320 = 87.5%; brokered and sweep deposits (47 + 34) / 501 = 16.2%; compensation 18,906 / 37,544 = 50.4% of operating expenses; preferred dividends 876 / 17,176 = 5.1% of net earnings; financing against alternatives fees 11.45 / 2.37 = 4.8, about five times. Margins: GBM pre-tax margin 17,574 / 41,453 = 42.4% (2025), 11,000 / 29,994 = 36.7% (2023); AWM 4,127 / 16,679 = 24.7% (2025), 4,865 / 16,316 = 29.8% (2024), 1,763 / 14,202 = 12.4% (2023). Balance sheet and capital: total assets 2,128 / 1,675.972 - 1 = 27.0% (end-2024 to June 2026); equity 121,996 to about 123,000, almost unchanged; deposits 558 / 433 - 1 = 28.9%, about 29%; loans to deposits 261 / 558 = 46.8%, about 47%; JPMorgan deposits 2,559,320 / 501,000 = 5.1 times; CET1 headroom 12.9 - 11.4 = 1.5 points, about 150 basis points; a repeat of the first-half fall 12.9 - (14.3 - 12.9) = 11.5%; basic shares 298.4 / 322.9 - 1 = -7.6%, about 8% fewer; TBVPS 335.49 / 316.02 - 1 = 6.2%; buyback price 935.45 / 984.57 - 1 = -5.0%; first-half ROE 21.7 - 1.7 = 20.0%; Platform Solutions pre-tax losses 783 + 1,047 + 1,989 + 2,175 + 1,075 = 7,069, about $7.1 billion. Valuation: trailing twelve months to June 2026 net revenues 58,283 - 29,645 + 37,565 = 66,203; net earnings 17,176 - 8,461 + 12,258 = 20,973; diluted EPS 51.32 - 25.07 + 38.51 = 64.76; P/E 283,220 / 20,973 = 13.5; P/S 283,220 / 66,203 = 4.28; year-end P/E 263.64 / 17.176 = 15.35 (2025), 179.75 / 14.276 = 12.59 (2024), 125.80 / 8.516 = 14.77 (2023), 128.08 / 21.635 = 5.92 (2021); 52-week high 935.45 / 1,153.99 - 1 = -18.9%, about 19% below; Morgan Stanley gap 308.32 - 283.22 = 25.1 billion; market value on basic shares 298.4 x 935.45 = 279.1 billion. Further: Platform Solutions provisions against revenue (old basis) 1,728 / 1,502 = 115% (2022), 1,135 / 2,378 = 47.7%, about 48% (2023), 1,540 / 2,427 = 63.5%, about 63% (2024); 2021 to 2022 revenue fall 59,339 - 47,365 = 11,974, about $12 billion; Q2 2026 equities less Q1 7,416 - 5,326 = 2,090; AWM revenue 2025 16,679 / 16,316 - 1 = 2.2%; liquidity products 1,065 / 4,041 = 26.4%, about a quarter; AUS year on year 4,041 / 3,293 - 1 = 22.7%, about 23%; alternatives 459 / 2,976 = 15.4% of long-term AUS; private banking and lending H1 2026 638 + 689 = 1,327, x 2 = 2,654, near $2.7 billion; VaR factors before diversification 82 + 65 + 19 + 30 = 196; GBM Q1 2026 12,738 / 17,227 = 73.9%, about 74%; transaction banking and private bank deposits (70 + 101) / 501 = 34.1%, about a third; GBM assets share 87.5%, nearly nine-tenths; EMEA 2025 14,155 / 12,250 - 1 = 15.6%, about 16%; unsecured long-term borrowings 285,500 / 242,634 - 1 = 17.7%, about 18%; JPMorgan deposits 2,559,320 / 2,406,032 - 1 = 6.4%; Goldman deposits 501 / 433 - 1 = 15.7%, about 16%; H1 2026 financing 2,278 + 5,867 = 8,145; Q2 2026 compensation 6,104 / 4,685 - 1 = 30.3%; diluted shares 321.4 / 306.5 - 1 = 4.9%, about 5%; advisory 2025 4,726 / 3,534 - 1 = 33.7%, about 34%; underwriting 2025 (1,784 + 2,829) / (1,677 + 2,521) = 4,613 / 4,198 - 1 = 9.9%, about 10%; debt share of underwriting 2,829 / 4,613 = 61.3%, about three-fifths; wealth channel 1,041 / 862 - 1 = 20.8%, about 21%; CET1 ratio 101,657 / 790,640 = 12.86%; 101,657 / 800,640 = 12.70%, so 10 billion of RWAs costs about 16 basis points; GBM pre-tax Q2 2026 7,499 / 4,075 - 1 = 84.0%; market value 2025 263.64 / 179.75 - 1 = 46.7% - Asset & Wealth Management arithmetic: assets under supervision, fees, alternatives and segment shares. — FY2019-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Goldman Sachs' Forms 10-K and 10-Q, its earnings releases and presentations, JPMorgan's Form 10-K and market data; operands shown in the source line.
  3. ReportedThe investments line, gains and income on the firm's own stakes, was $1,988 million in 2023, $2,627 million in 2024 and $1,305 million in 2025.
    Goldman Sachs Form 10-K for fiscal 2025 - segment results on the basis restated in the fourth quarter of 2025: net revenues by line, pre-tax earnings, return on equity, average common equity, loans and assets by segment for 2023-2025 - Asset & Wealth Management and Platform Solutions segment results. — FY2023-FY2025 · publ. 25 February 2026 · source ↗
  4. ReportedManagement fees and private banking, which the firm calls more durable revenues, have grown instead: firmwide more durable revenues rose from $12.2 billion in 2019 to $26.3 billion in 2025.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Asset & Wealth Management: alternatives fundraising, fees, wealth, mandates and historical principal investments. — FY2025 · publ. 15 January 2026 · source ↗
  5. ReportedThe investments line is lumpy: in 2021 it helped make Asset & Wealth Management revenue $21,965 million on the old basis, and in 2023 commercial real estate impairments of $1.46 billion dragged on it.
    Goldman Sachs Form 10-K for fiscal 2022 - net revenues, net earnings, ROE and ROTE for 2020-2022, segment results on the basis then used, and the GreenSky and NNIP acquisitions. — FY2022 · publ. February 2023 · source ↗
  6. ReportedThe investments line is lumpy: in 2021 it helped make Asset & Wealth Management revenue $21,965 million on the old basis, and in 2023 commercial real estate impairments of $1.46 billion dragged on it.
    Goldman Sachs Form 10-K for fiscal 2023 - commercial real estate impairments, the GreenSky write-down and consumer goodwill impairment, the efficiency ratio of 74.6% and capital returned of $9.39 billion. — FY2023 · publ. February 2024 · source ↗
  7. ReportedAsset & Wealth Management return on equity was 12.5% in 2025, including about 2.3 percentage points of reduction from the historical investments and an FDIC special assessment.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Asset & Wealth Management: alternatives fundraising, fees, wealth, mandates and historical principal investments. — FY2025 · publ. 15 January 2026 · source ↗
  8. Moat Explorer calcWithout that, it would have been near 15%.
    Moat Explorer calculation from Goldman Sachs' reported figures ($ millions unless stated; calendar years). Growth: net revenues 2025 58,283 / 53,512 - 1 = 8.9%, about 9%; 2022 47,365 / 59,339 - 1 = -20.2%; net earnings 2022 11,261 / 21,635 - 1 = -47.9%, nearly half; pre-tax earnings 21,852 / 10,739 = 2.03 times, about double; compensation 18,906 / 16,706 - 1 = 13.2%; total operating expenses 37,544 / 33,767 - 1 = 11.2%; preferred dividends 876 / 751 - 1 = 16.6%; CEO pay 47 / 39 - 1 = 20.5%; equities 16,535 / 11,549 - 1 = 43.2%; FICC 14,522 / 12,150 - 1 = 19.5%; FICC intermediation 10,271 / 9,318 - 1 = 10.2%; FICC financing 4,251 / 2,832 - 1 = 50.1%; Global Banking & Markets 41,453 / 29,994 - 1 = 38.2%; GBM pre-tax 17,574 / 11,000 - 1 = 59.8%; advisory 4,726 / 3,299 - 1 = 43.3%; underwriting (1,784 + 2,829) / (1,153 + 1,763) = 4,613 / 2,916 - 1 = 58.2%; investment banking fees 9,339 / 6,215 - 1 = 50.3%; 9,339 - 6,215 = 3,124, about $3.1 billion; Q2 2026 pace 3,395 x 4 = 13,580, 13,580 / 9,339 = 1.45; financing 11.45 / 6.03 = 1.90, close to double; intermediation best/worst 19.6 / 15.8 = 1.24; equity underwriting Q2 985 / 428 - 1 = 130%; H1 2026 equities 12,742 / 8,493 - 1 = 50%. Assets under supervision: 4,041 / 3,606 - 1 = 12.1% (six months); 3,606 / 3,137 - 1 = 15.0%; Q2 2026 rise 4,041 - 3,650 = 391 = inflows 230 + appreciation 161; management and other fees 11,538 / 10,415 - 1 = 10.8%; historical principal investments 9.4 - 6.0 = 3.4 billion; alternatives target 750 - 459 = 291 billion, 291 / 4.5 = 64.7, about 65 a year; 291 x 0.58% = 1.69 billion, about 1.7 billion; Shell mandate 40 / 4,041 = 1.0%; AWM ROE 12.5 + 2.3 = 14.8, near 15%. Shares of revenue: GBM 15,520 / 20,338 = 76.3% (Q2 2026), 41,453 / 58,283 = 71.1% (2025), 29,994 / 46,254 = 64.8% (2023); AWM 16,679 / 58,283 = 28.6% (2025), 16,316 / 53,512 = 30.5% (2024), 14,202 / 46,254 = 30.7% (2023), 4,597 / 20,338 = 22.6% (Q2 2026); equities 7,416 / 15,520 = 47.8% of the segment in Q2 2026; advisory 4,726 / 58,283 = 8.1%; GBM pre-tax 17,574 / 21,852 = 80.4%; FICC plus equities 14,522 + 16,535 = 31,057; Q2 2026 financing 1,216 + 3,259 = 4,475; durable revenues 26.3 / 58.283 = 45.1% (2025), 12.2 / 36.546 = 33.4% (2019); GBM assets 1,582,670 / 1,809,320 = 87.5%; brokered and sweep deposits (47 + 34) / 501 = 16.2%; compensation 18,906 / 37,544 = 50.4% of operating expenses; preferred dividends 876 / 17,176 = 5.1% of net earnings; financing against alternatives fees 11.45 / 2.37 = 4.8, about five times. Margins: GBM pre-tax margin 17,574 / 41,453 = 42.4% (2025), 11,000 / 29,994 = 36.7% (2023); AWM 4,127 / 16,679 = 24.7% (2025), 4,865 / 16,316 = 29.8% (2024), 1,763 / 14,202 = 12.4% (2023). Balance sheet and capital: total assets 2,128 / 1,675.972 - 1 = 27.0% (end-2024 to June 2026); equity 121,996 to about 123,000, almost unchanged; deposits 558 / 433 - 1 = 28.9%, about 29%; loans to deposits 261 / 558 = 46.8%, about 47%; JPMorgan deposits 2,559,320 / 501,000 = 5.1 times; CET1 headroom 12.9 - 11.4 = 1.5 points, about 150 basis points; a repeat of the first-half fall 12.9 - (14.3 - 12.9) = 11.5%; basic shares 298.4 / 322.9 - 1 = -7.6%, about 8% fewer; TBVPS 335.49 / 316.02 - 1 = 6.2%; buyback price 935.45 / 984.57 - 1 = -5.0%; first-half ROE 21.7 - 1.7 = 20.0%; Platform Solutions pre-tax losses 783 + 1,047 + 1,989 + 2,175 + 1,075 = 7,069, about $7.1 billion. Valuation: trailing twelve months to June 2026 net revenues 58,283 - 29,645 + 37,565 = 66,203; net earnings 17,176 - 8,461 + 12,258 = 20,973; diluted EPS 51.32 - 25.07 + 38.51 = 64.76; P/E 283,220 / 20,973 = 13.5; P/S 283,220 / 66,203 = 4.28; year-end P/E 263.64 / 17.176 = 15.35 (2025), 179.75 / 14.276 = 12.59 (2024), 125.80 / 8.516 = 14.77 (2023), 128.08 / 21.635 = 5.92 (2021); 52-week high 935.45 / 1,153.99 - 1 = -18.9%, about 19% below; Morgan Stanley gap 308.32 - 283.22 = 25.1 billion; market value on basic shares 298.4 x 935.45 = 279.1 billion. Further: Platform Solutions provisions against revenue (old basis) 1,728 / 1,502 = 115% (2022), 1,135 / 2,378 = 47.7%, about 48% (2023), 1,540 / 2,427 = 63.5%, about 63% (2024); 2021 to 2022 revenue fall 59,339 - 47,365 = 11,974, about $12 billion; Q2 2026 equities less Q1 7,416 - 5,326 = 2,090; AWM revenue 2025 16,679 / 16,316 - 1 = 2.2%; liquidity products 1,065 / 4,041 = 26.4%, about a quarter; AUS year on year 4,041 / 3,293 - 1 = 22.7%, about 23%; alternatives 459 / 2,976 = 15.4% of long-term AUS; private banking and lending H1 2026 638 + 689 = 1,327, x 2 = 2,654, near $2.7 billion; VaR factors before diversification 82 + 65 + 19 + 30 = 196; GBM Q1 2026 12,738 / 17,227 = 73.9%, about 74%; transaction banking and private bank deposits (70 + 101) / 501 = 34.1%, about a third; GBM assets share 87.5%, nearly nine-tenths; EMEA 2025 14,155 / 12,250 - 1 = 15.6%, about 16%; unsecured long-term borrowings 285,500 / 242,634 - 1 = 17.7%, about 18%; JPMorgan deposits 2,559,320 / 2,406,032 - 1 = 6.4%; Goldman deposits 501 / 433 - 1 = 15.7%, about 16%; H1 2026 financing 2,278 + 5,867 = 8,145; Q2 2026 compensation 6,104 / 4,685 - 1 = 30.3%; diluted shares 321.4 / 306.5 - 1 = 4.9%, about 5%; advisory 2025 4,726 / 3,534 - 1 = 33.7%, about 34%; underwriting 2025 (1,784 + 2,829) / (1,677 + 2,521) = 4,613 / 4,198 - 1 = 9.9%, about 10%; debt share of underwriting 2,829 / 4,613 = 61.3%, about three-fifths; wealth channel 1,041 / 862 - 1 = 20.8%, about 21%; CET1 ratio 101,657 / 790,640 = 12.86%; 101,657 / 800,640 = 12.70%, so 10 billion of RWAs costs about 16 basis points; GBM pre-tax Q2 2026 7,499 / 4,075 - 1 = 84.0%; market value 2025 263.64 / 179.75 - 1 = 46.7% - Asset & Wealth Management arithmetic: assets under supervision, fees, alternatives and segment shares. — FY2019-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Goldman Sachs' Forms 10-K and 10-Q, its earnings releases and presentations, JPMorgan's Form 10-K and market data; operands shown in the source line.
  9. ReportedThe firm puts the reduction at 91%.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Global Banking & Markets: league tables, wallet share, clients, financing and intermediation. — FY2025 · publ. 15 January 2026 · source ↗
  10. ReportedThe investments line, which used to swing the segment, earned $180 million in the first quarter of 2026 and $441 million in the second, still enough to move a quarter but no longer enough to decide a year.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - firm results: net revenues, earnings, EPS, returns and costs. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 28, 2026