Goldman sets M&A pace with freed capital

T. Rowe Price

23/09/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Stephen Gandel
NEW YORK, Sept 22 (Reuters Breakingviews) - Goldman Sachs GS.N is spending its White House dividend. President Donald Trump's financial deregulation efforts are freeing up capital for mega-banks, and the one led by David Solomon has used the windfall to beef up the amount of money it manages. With its fifth, and largest, acquisition in less than a year now in the frame, rivals may be feeling pressure to follow suit.
The administration's proposed rule changes, although not yet finalized, would leave the six largest US banks with more than $200 billion of excess capital. Some of them are contemplating deals. JPMorgan CEO Jamie Dimon said his bank could pursue one worth as much as $20 billion in the coming years. Goldman, however, has mobilized faster.
Its latest target is Palmer Square Capital, a corporate debt shop with $37 billion under management, according to a Bloomberg report on Tuesday. If successful, it would add to a $1 billion investment in T. Rowe Price TROW.O and last month's agreed $2.3 billion purchase of ETF manager NEOS Investments. Goldman has already committed more than $6 billion to M&A, nearly a quarter of the $28 billion in excess capital that Bloomberg Intelligence estimates from easing capital requirements.
Solomon's deal-making track record is patchy. Earlier forays into consumer banking and financial planning ended in costly retreats. More recently, Goldman has aped Morgan Stanley's playbook in asset management to add steadier streams of revenue than those from advisory fees, and boost its valuation. Buying NEOS Investments and Innovator Capital cost roughly 7.5% of their respective assets under management.
Applying that same yardstick implies a $2.8 billion purchase price for Palmer. Because of its specialty in credit and collateralized loan obligations, which are generally less profitable than equities, the cost will probably be lower, however. Moreover, because such products are closely linked to leveraged buyouts and merger cycles, Palmer will be more in Goldman's wheelhouse but less diversifying.
Even so, the acquisitions are piling up as Solomon plays catch-up to Morgan Stanley MS.N and Bank of America BAC.N in asset management. JPMorgan JPM.N is also looking to expand in the same area while Wells Fargo WFC.N aims to parlay its traditional deposit and lending capabilities into more investment banking income. If Goldman is rewarded, or at least not punished, for spending its surplus capital elsewhere, it might put its stamp on M&A markets in a whole new way.
     
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CONTEXT NEWS
Goldman Sachs is among the leading bidders for Palmer Square Capital, a firm with $37 billion under management that invests primarily in corporate debt, Bloomberg reported on September 22, citing unnamed sources. 

(Editing by Jeffrey Goldfarb; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on GANDEL/ stephen.gandel@thomsonreuters.com))