Goldman Sachs’s family office clients have seen robust performance this year in their investment portfolios, with clients adding AI themes for long-term opportunities.

Goldman Sachs’s dedicated family office coverage team, Apex, overseen by Ling Pong, the head of capital markets, equity structuring, and managed strategies, APAC, Goldman Sachs Private Wealth Management (Goldman Sachs PWM), works with an extensive network of large family offices in the region.

“Our wealth management and investment solutions are differentiated given our client-centric, institutional approach, as well as the tenure and expertise of our globally connected teams. Apex provides our most sophisticated and institutionalised family office clients access to the firm’s intellectual capital, private market experience, and differentiated deal flow,” Pong told Asian Private Banker.

As family wealth and assets grow, Pong said Asian families are increasingly focused on long-term asset allocation and risk management, as well as adopting a more institutionalised and disciplined approach to managing their wealth.

“Increasing wealth brings increasing complexity and considerations, and it can take significant time and energy to manage the many aspects of wealth – both financial and non-financial. Our family office clients have access to holistic coverage to navigate all aspects of their wealth, from investments to tax-efficiency and estate planning strategies, and philanthropy and fiduciary services.”

Increasing AI exposure

In terms of sectoral focus for this year, Pong said family offices tend to concentrate on the big secular growth themes given their long-duration capital.

“Our focus is on the UHNW [segment]. Many of our clients are founders, executives, or early investors of listed companies or operators of listed family businesses in Asia,” Pong said, adding that clients are generally overweight technology across both public and private markets as many of them are tech entrepreneurs or executives who are exceptionally sensitive to mega tech trends.

In particular, she noted that a lot of family office clients have been building exposure to AI over the past 18 months, either through public equities, direct investment in the private space, or co-investing with leading GPs, particularly in hyperscalers, semiconductors and power.

“There is debate on the pace of monetisation from AI following the significant spend on infrastructure. Some investors, while broadly long-term optimistic on AI being a paradigm shift, are short-term tactical [and] opportunistically taking profit,” she explained.

“And on a narrower basis, defence, healthcare, and climate tech have also been sectors of thematic interest.”

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Pick up in investment activities

Recently, private banks have been advising clients to move out of cash positions as deposit rates come down. Pong shared Goldman Sach’s PWM clients have been deploying cash steadily over the past 12 months. On the investment side, she said, “performance year to date has been robust.”

Given the bank’s strong trading capability, activity has been high in public equities, especially in the US. For fixed income, trading was also robust in response to higher yields at the beginning of the year and in anticipation of Fed easing and the decline of cash deposit rates in recent months, she said.

For global public markets access, Goldman Sachs PWM leverages the bank’s markets coverage group, a cross-asset sales and trading desk, to provide investment advice and institutional-level coverage to family office clients.

In relation to China, Pong said that the bank’s family office clients have significant allocations to China equities given their home bias. The recent rally has certainly been welcomed by clients given their exposures, and also provides tactical trading opportunities. “Our clients are eagerly awaiting fiscal policy follow-through and continue to watch the market very closely.”

In addition, Pong said that family office clients remain active in allocating to private equity, in particular buyouts and secondaries, as well as private credit, investing primarily through best-in-class managers. She added that the US giant has been connecting clients with high-quality alternative investment opportunities, across both proprietary and external offerings through its alternative capital markets platform, which is under the helm of Lily Chan.

“We are one of the largest alternative managers in the world with approximately US$500 billion in total assets,” she said.

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‘One Goldman Sachs’ strategy

Similar to many of its peers, Goldman Sachs’ strategic initiative of ‘One Goldman Sachs’ is how the bank provides the full capabilities and relationship network of Goldman Sachs for clients with a holistic long-term coverage ethos.

“We bring to bear our world-class intellectual capital and expertise across all our businesses across the world. It puts clients at the centre of everything we do,” Pong asserted.

“An example of our one-firm capability is how all our businesses come together to partner with our clients through different life stages,” she said. For instance, prior to an IPO, the bank’s investment banking colleagues will work with the company on capital raising, while the PWM team will work with the founder on estate and structure planning.

“Following the listing of the company, we work with our private deposit and lending and global markets teams to explore various stake management tools to generate liquidity for the client. We help the client build a diversified and customised portfolio with our industry-leading investment solutions across public and private assets managed by our asset and wealth management professionals, to meet the liquidity, investment and wealth planning needs of the family.”

“Client centricity is our core principle, and we rally resources across the global Goldman Sachs network so that clients get the best the firm has to offer.”