Conference Presentation, Earnings Call
Executing Our Strategy - Goldman Sachs 2020 Investor Day
- The firm targets an ROE exceeding 10% within the next three years by redeploying talent, making strategic hires, and executing a broad-based global markets plan to address wallet share gaps.
- Traditional assets under management are projected to increase by $250 billion over the next five years, while third-party alternative assets aim to grow by $100 billion in the same period.
- Global market coverage is expected to rise by 30% following the expansion that began in 2017, with the goal of fixing instances where the firm ranks outside the top three for 100 large institutional clients.
- The consumer and wealth segment intends to expand its advisor footprint globally by 30% over the next three years and will migrate the integrated wealth management platform to the mass affluent segment.
- A large-scale transaction banking business is planned to reach $50 billion in deposit balances and $1 billion in revenues, alongside increased lending penetration with private wealth clients outside the United States.
- A capital reduction of $4 billion across investing businesses is anticipated over the next five years as capital-intensive investments are moved into fund form.
- China strategy involves applying a patient and methodical approach to a plan that includes applying for 100% ownership of the business in that region.
- Corporate channel programs aim to launch 30 new annual programs covering 300,000 employees by deepening penetration of the corporate franchise.
- Leadership development will focus on tailored plans and cross-pollination through intentional mobility, while the global footprint expansion targets a 30% increase in companies covered.
- Cost savings of $1.3 billion over the next three years will be reinvested into growth priorities, including a 10% increase in the 2020 engineering budget to nearly $4.3 billion and over $2 billion in deployment for growth priorities in 2020.
- Operational alignment includes moving 7,500 individuals from engineering and operations into business units, simplifying organizational pyramid structures, and building centers of excellence in strategic locations for AI, cloud, and data analytics.
- The firm aims to increase the percentage of employees working in key strategic locations to near 40% over a reasonable period while establishing an integrated expense architecture focused on financial planning and analysis.
- Client coverage efforts will expand to 100 clients over the course of 2020 with a holistic approach and enhanced digital experiences driven by close collaboration with engineering teams.
- Enhanced incentive structures featuring metric-based parameters and performance-based equity are in place for the management committee to drive accountability and maintain a pay-for-performance mentality.
- Leadership views protecting and building the firm's brand as a top priority, with a long-term methodical approach applied to four major growth priorities and a focus on curating thought leadership content.