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  Wall Street Titans: Goldman Sachs, BlackRock and Blackstone: Who Will Rule Wall Street in Ten Years? | News | Bit Updates
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Wall Street Titans: Goldman Sachs, BlackRock and Blackstone: Who Will Rule Wall Street in Ten Years? | News

Saturday, December 23rd, 2017 | bitcoin updates

The investment landscape will change over the next few years – as do Wall Street titans Goldman Sachs, BlackRock and Blackstone. Whether or not the Wall Street sizes will be able to hold their own in a changing environment depends on how well the houses can adapt to the changing conditions. Compared to "Bloomberg", all three provided information on the challenges to be faced and the measures they will take to address them.
Departure into new business areas

The Goldman Sachs Group seeks to focus more on asset-managing businesses such as investment management and digital banking, due to bank regulation and subdued demand. While the traditional bank is still fighting for the favor of its shareholders, the Blackstone Group relies on investors' appetite for alternative investments. But Blackstone has quite a small investor in the sights and thus precedes in a territory that in turn is traditionally dominated by Black Rock. This hits BlackRock at a sensitive spot. A Blackstone price battle on passive funds could have dire consequences for BlackRock's revenue. For this reason, BlackRock has to look for alternatives and wants to better position itself as a data and service provider.
Blackstone earns heavily on alternative investments – BlackRock relies on low-cost

Blackstone has long since discovered the alternative business and is doing well, now that investors are putting record-breaking sums into alternative investments to produce acceptable returns. But as much money investors are willing to pay for high-return investments, they do not want to spend on passive products that are market-oriented. In this niche, however, BlackRock encounters. With its low-cost offerings such as ETFs, the asset manager recorded inflows of a whopping 138.2 billion US dollars in the first half of this year. However, BlackRock has even greater ambitions and wants to focus more on tailoring portfolios to the specific needs of individual customers. BlackRock also imagines technical solutions for this. "BlackRock wants to become the driving force of the investment ecosystem," said President Rob Kapito in an interview.
Goldman fights on two fronts

Goldman, on the other hand, wants to cover both areas while managing the private capital of wealthy clients and institutions, while selling a range of ETFs to retail investors. Although Goldman's ETF business is relatively small against BlackRock's, it has recently risen massively and may well be bullish for Goldman. Goldman Sachs' CEO, Lloyd Blankfein, is focusing on new areas of growth to counteract regulation following the financial crisis. That is sorely needed. Goldman Sachs has long relied on his dedicated market knowledge and building on the consulting business. However, rising markets and low volatility are making this business increasingly difficult. Although ETFs are doing well on the market, the price war in the ETF business is likely to remain a major challenge for all Wall Street sizes in the future.
BlackRock surfs on the wave of passive investments – but how much longer?

So far BlackRock can keep up well in the price wars of ever cheaper ETFs. According to Bloomberg, the house said it had offset the loss of revenue by lowering its ETF prices in less than a year. At the end of the third quarter, passive strategies, including ETFs and index investment opportunities, accounted for a whopping 65 percent of BlackRock's total assets under management and 41 percent of sales. Even if the trend should turn back to active investments, Kapito sees no reason to worry. BlackRock still has a number of attractive offers that could cover such a flow.
Challenges and plans in the near future

All three Wall Street greats will have to face their own challenges over the next few years. For example, Blackstone will have to take over the reigning CEO Steve Schwarzman in the not too distant future, and the industry is waiting impatiently. In addition, Blackstone wants to expand its customer base, paying particular attention to ordinary savers. Schwarzman himself told Bloomberg that access to such non-accredited investors is one of Blackstone's "dreams". In fact, Blackstone is constantly working to further diversify its customer base looking for more sustainable sources of capital. Blackstone has to think outside the box and open up new business areas in addition to its core areas of private equity, real estate and credit.

BlackRock, on the other hand, has to continue to work on its "stock-picking concept", which is now threatening to fall off its competitors. The asset manager also wants to build on his alternative business. BlackRock currently manages $ 131 billion in alternative business.

Goldman Sachs is gearing up for the future as the bank gathers consumer revenue to use for a new online lender named Marcus. According to a plan formulated by co-president Harvey Schwartz in September, "Marcus", together with a private wealth company and other asset management companies, will be responsible for 50 percent of the company's revenue growth in three years.
Leadership depends on changeability

Ultimately, the future will drive all three Wall Street greats away from their ancestral lands. Anyone who wants to stay in the top ten years from now has to prove their versatility. This path will inevitably lead Goldman, Blackstone and BlackRock into the territory of the competition. In order to be able to survive alongside these competitors in these new fields, all three companies must exploit their potential for development and operate in a customer-oriented manner. Which concept will be sustainably successful, will have already decided in a few years. Whether the trend is sustainable towards cheaper investments or whether the wind will turn again, is uncertain. But the fact is: the decision will be made by the customers.

Editors finanzen.net
Image sources: Maynard Case / Shutterstock.com, Michela Lietti, Istockphoto, Robert Crum / Shutterstock.com


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