Within Goldman Sachs, for example, lurks the equivalent of a Blackstone (hedge funds, private equity, credit, real estate, and other investments), which could be distributed to shareholders.
At 1.8 times book value, Blackstone had a market capitalization of around $8 billion on June 30 on $129 billion of assets under management.
Goldman manages $148 billion of alternative assets and in addition a substantial “lending and investing” (proprietary trading and investing) business that produced first half net revenues of $3.7 billion.
This “Blackstone,” with well less than $50 billion of assets on its own balance sheet, may not be declared a “systemically important” non-bank but, even if it is, its future capital requirements are likely to be much less stringent and more manageable than those of a full-fledged bank, which Goldman Sachs now is.
Part of the issue is regulatory. With higher capital requirements from regulators, there just isn't much money to be made by a bank engaging in proprietary trading. Hedge funds and private-equity firms can make money doing these things in part because they have much lighter regulatory burdens.
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