Goldman Sachs (GS) Could Spin-Off PE Unit
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Price: $1,094.44 --0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
EPS Growth %: +25.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
EPS Growth %: +25.9%
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Goldman Sachs Group Inc. (NYSE: GS) is reportedly conducting serious discussions about spinning off a least a portion of its massive private equity arm, according to FOX Business Network’s Charles Gasparino.
This would mark one of the first casualties of the financial reform and its restrictions on the ownership of private equity and hedge funds by banks.
Gasparino reported that the talks at Goldman are about more than just a possibility, accord to a senior investment banker with direct knowledge of the situation.
The uncertainty over how severe the restrictions will be from the financial reform, has Goldman debating if it will spin of all or par of its private equity arm into a separate company.
The bank does not publicly release the value of its private equity business, but according to Fox Business, securities filings by the firm have shown that the division has raised $82 billion, which includes $11.5 billion from executives within the firm itself.
According to the Volker Rule contained within the financial reform bill, firms cannot have these funds with more than 3 percent of the bank’s own money. Goldman is closer to 30 percent when appreciation is included.
Any action is not considered to be imminent as the Volcker Rule will allow firms like Goldman a time table of anywhere between five to seven years to spin off these businesses.
Bank of America (NYSE: BAC) said Monday that it will spin off one of its small funds, and Morgan Stanley (NYSE: MS) is reportedly considering a move along the same lines.
Shares of Goldman are up $1.12 to $153.92 in late market movement Tuesday.
This would mark one of the first casualties of the financial reform and its restrictions on the ownership of private equity and hedge funds by banks.
Gasparino reported that the talks at Goldman are about more than just a possibility, accord to a senior investment banker with direct knowledge of the situation.
The uncertainty over how severe the restrictions will be from the financial reform, has Goldman debating if it will spin of all or par of its private equity arm into a separate company.
The bank does not publicly release the value of its private equity business, but according to Fox Business, securities filings by the firm have shown that the division has raised $82 billion, which includes $11.5 billion from executives within the firm itself.
According to the Volker Rule contained within the financial reform bill, firms cannot have these funds with more than 3 percent of the bank’s own money. Goldman is closer to 30 percent when appreciation is included.
Any action is not considered to be imminent as the Volcker Rule will allow firms like Goldman a time table of anywhere between five to seven years to spin off these businesses.
Bank of America (NYSE: BAC) said Monday that it will spin off one of its small funds, and Morgan Stanley (NYSE: MS) is reportedly considering a move along the same lines.
Shares of Goldman are up $1.12 to $153.92 in late market movement Tuesday.
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