Goldman Sachs Group Inc. struck a deal to sell an investment-advisory business aimed at the mass-affluent market to Creative Planning LLC, a $240 billion wealth-management firm, according to people with knowledge of the matter.
The bank agreed to sell the business, with $29 billion in assets, that grew out of United Capital, a registered investment adviser it purchased for $750 million, according to a statement.
The offloading of the company just four years after Goldman acquired it signals the firm's intention to refocus its attention on the ultra-rich segment where it has a dominant presence.
Goldman didn't disclose the sale price but said it expects to recognize a gain when the deal closes.
That's in sharp contrast to the other sale Goldman is pursuing: the divestment of installment lender GreenSky at a steep discount just over a year after it completed that takeover.
Creative Planning is run by Peter Mallouk, who has also written several investing self-help books. Those include a couple with motivational speaker Tony Robbins, who was once the "chief of investor psychology" at Mallouk's firm.
Goldman expects a boost to its profit margin in the wealth unit after selling United Capital. That business has more than 16,000 clients and $1 trillion of assets under supervision.
At an investor day earlier this year, Goldman said it expects to continue growing its private wealth, workplace offering Ayco, and the related private-banking and lending business.
Deal History
The United Capital acquisition was part of Chief Executive Officer David Solomon's plan to broaden Goldman's reach beyond a traditional focus on ultra-wealthy individuals.
It gained an instant connection with about 22,000 clients who had a little over $1 million each with the platform. That's significantly less than Goldman's typical uber-rich clients, who entrust tens of millions of dollars to the bank.
While the effort was separate from Goldman's failed consumer-banking foray, it represented a similar pivot that sought to pitch the bank's offerings to Main Street. It is now undoing much of that strategic turn.
