Goldman to Sell Former United Capital Unit to Creative Planning

What You Need to Know

The business, formerly led by Joe Duran, oversees $29 billion in assets; it was purchased by Goldman for $750 million in 2019.
Creative Planning has $240 billion in assets and is run by Peter Mallouk, who has also written several investing books.
Last month, Creative Planning announced a custody deal with Goldman and is expected to expand on that partnership.

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 a business that oversees about $29 billion in assets and grew out of United Capital, a registered investment adviser it purchased for $750 million.

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.

It wasn’t immediately clear how much the platform will fetch, but it’s expected to result in an accounting gain for Goldman 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.