GLOBAL - Goldman Sachs Asset Management (GSAM) increased its assets under management by 6% during the third quarter of 2006 but saw net revenues decrease by 10%.
AuM were up to US$629bn and net revenues posted were $918m. Although this was 26% higher than that generated in Q3 2005, the AuM and securities services sectors of the corporate saw their net revenues decrease by 10% compared to Q2.
Regarding this discrepancy, GSAM said: "While growth in AuM will generally lead to increased revenues over time, it will not be completely correlated in any given quarter."
The increase in AuM reflected net asset inflows of $27bn during Q3, principally in alternative investment and fixed income assets. Money market net asset inflows of $3bn and market appreciation of $6bn were mainly derived from equity and fixed income assets.
The asset management generated revenues were primarily driven by significantly higher management and other fees, principally due to growth in AuM..
Overall net revenues for the Goldman Sachs Group in Q3 were $7.46bn, down from$10.10bn in Q2. The corporate posted net earnings of 1.68bn which decreased from $2.4bn in the previous quarter.
Q3 2006 was cited to be the third best revenue quarter in Goldman Sachs' history.
Chairman and CEO Lloyd Blankfein said: "While market conditions were more challenging this quarter, our results underscore the strenght and depth of our client franchise."
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