Why Goldman stands out as a Trump-era winner on Wall Street

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Subscribe to enjoy similar stories. Donald Trump’s election has unleashed big hopes in the market for dealmaking, regulatory easing and private credit. Together, all that would put some extra shine on Goldman Sachs.

Goldman is the top-performer among global banks in the S&P 500 so far in November, up nearly 15%. That is well above S&P 500 banks, which are up around 9%, and on par with private investment firm Apollo Global Management’s gain this month. That may be no coincidence.

Like other Wall Street banks, Goldman would benefit from an uptick in merger-and-acquisition or initial-public-offering activity, as well as any regulatory rollback. And generally when things are good on Wall Street, they are very good at Goldman: During the surge of activity in 2021, its return on equity for the year was 23%, versus 12% for S&P 500 banks overall. But Goldman could also be a potential big winner among banks from big growth in private credit and alternative assets—the same hope propelling Apollo’s shares in recent quarters.

A pillar of Goldman’s recent strategy has been to shift its asset-management arm from betting the firm’s own money to more investing for clients through funds. The latter is less capital-intensive and leads to a stream of steady management fees. One major aim is to grow Goldman’s alternative asset-management business, which refers to assets beyond public stocks, bonds and cash.

Goldman was managing about $140 billion in private-credit assets as of the third quarter. And it is continuing to push into fast-growing realms of that market like asset-backed securities, which are investment-grade-type products aimed at insurers. Goldman has also been expanding its business providing financing for nonbank lenders.