ACR Alpine Capital Research LLC on Goldman Sachs
Thesis
Goldman Sachs is part of the fund's Evolving Financials theme. The strategy believes financial companies spent the post-financial-crisis period improving efficiency, reducing costs and strengthening capital while operating under heavy regulation and subdued capital markets activity. Conditions are now changing as capital markets activity and economic confidence recover and regulation becomes potentially more favorable. The fund believes deregulation could unlock excess capital, accelerate buybacks, improve lending and raise returns on equity. This creates the potential for cyclical recovery and structural improvement in financial-sector economics to occur simultaneously.
“Goldman Sachs generated strong returns as improving capital markets activity and expectations for regulatory reform supported financials.”