On Wall Street, the idea that a strong asset management unit could help buffer a firm from volatility in trading has been much discussed. Morgan Stanley and Bank of America Merrill Lynch are betting it holds true. Goldman Sachs also hopes for better performance out of its massive asset management unit, though the press has noticed a few hiccups as of late.

The catalyst for this closer look appears to be the Facebook turnabout. But the real concern is performance. "The division managed most of the $840 billion in assets Goldman oversaw in December, a figure that dwarfs the money managed by major firms such as Legg Mason and Franklin Resources. Yet evidence suggests the behemoth inside the 141-year-old investment bank is generating subpar returns for investors and is a persistent headache for its chairman, Lloyd Blankfein," Bloomberg reports.

"The chief executive has dispatched lieutenants on missions to fix the listless asset manager. Investment management is now run by Ed Forst and Timothy O'Neill, who are the eighth and ninth Goldman investment chiefs in eight years." 

Pension funds in California and Nevada have yanked more than $900 million due to concerns about performance and turnover. For now, however, most customers seemed inclined to stick with the firm, despite some expected "negative recruiting" by rival firms. The brand is that strong.

The firm indeed appears to be at the bottom of a cycle. EVestment Alliance conclued that Goldman trailed its peers in 73.8 percent of the categories it looked at during the five years ended Sept. 30. Morningstar found that the 338 fund share classes it looks at trailed the average return of their peers in every broad category.

Asset management remains a priority at Goldman. The firm is due for a good year or two. It may represent CEO Blankfein's last great success. 

For more:
- here's the article

Related Articles:
Goldman Sachs conflicts to hit its wealth management unit
Goldman Sachs to shutter prop trading unit
Break up Goldman Sachs, a provocative idea