Goldman Sachs to Reduce Investments on Alternative Assets

Goldman Sachs Group Inc's (GS.N) asset management arm will significantly reduce the $59 billion of alternative investments that weighed on the bank's earnings, as an executive revealed.

The Wall Street giant plans to divest its positions over the next few years and replace some of those funds on its balance sheet with outside capital, Julian Salisbury, chief investment officer of asset and wealth management at Goldman Sachs, said in an interview.

"I would expect to see a meaningful decline from the current levels," Salisbury said. "It's not going to zero because we will continue to invest in and alongside funds, as opposed to individual deals on the balance sheet."

Goldman had a dismal fourth quarter, missing Wall Street profit targets by a wide margin. Like other banks struggling as company dealmaking stalls, Goldman is letting go of more than 3,000 employees in its biggest round of job cuts since the 2008 financial crisis.

The bank will provide further details on its asset plan during Goldman Sachs' investor day on Feb. 28, Salisbury said. Alternative assets can include private equity or real estate as opposed to traditional investments such as stocks and bonds.