Goldman Sachs Q3 2026 Earnings Call: Revenue Hits $18.7 Billion

Goldman Sachs (NYSE: GS) reported net revenues of $18.7 billion for Q3 2026, the second-highest quarterly total in its history. Strength in investment banking, equities and asset and wealth management drove an 18.7% return on equity, while management said the investment banking backlog remained robust.

Key Takeaways

• Q3 net revenues reached $18.7 billion, with diluted EPS of $17.01, ROE of 18.7% and ROTE of 20.5%.
• Excluding an accelerated charitable contribution, management said EPS would have been approximately $18, with ROE near 20% and ROTE near 21.5%.
• Global Banking & Markets generated $13.5 billion of revenue. Equities revenue increased 72% year over year to $6.4 billion, its second-best quarterly result.
• Asset & Wealth Management revenue rose 14% to $5.1 billion. Management and other fees increased 22% to a record $3.6 billion.
• Assets under supervision reached a record $4.1 trillion after $97 billion of long-term fee-based net inflows, marking the 35th consecutive quarter of inflows.
• Goldman Sachs raised its 2026 alternatives fundraising expectation to approximately $150 billion after raising $122 billion year to date.

Key Financial Data

Business and Operating Performance

Global Banking & Markets

Advisory revenue rose 18% year over year to a quarterly record of $1.7 billion. Goldman Sachs retained the No. 1 position in announced and completed M&A volumes year to date and advised on $1.5 trillion of announced transactions.

Equity underwriting revenue increased 43% to $666 million, supported by IPO and secondary offering activity. Debt underwriting revenue rose 15% to $904 million, primarily due to stronger investment-grade issuance. Management said the investment banking backlog remained robust despite strong revenue realization during the quarter.

FICC revenue was essentially unchanged year over year. Intermediation revenue declined 7% as weakness in mortgages, rates and credit offset strength in currencies and commodities. FICC financing revenue increased 14% to its second-highest level.

Equities revenue climbed 72% to $6.4 billion. Intermediation revenue rose 52%, while financing revenue increased 96% to a record, driven by higher average prime balances and strong activity in Asia. Year-to-date financing revenue across FICC and Equities reached a record $12.7 billion and represented more than 40% of their combined revenue.

Management said demand for equity financing continued to exceed available industry capacity, supporting pricing and selective balance-sheet deployment. It also attributed part of the growth to multiyear investment in Asia.

Asset & Wealth Management

Asset & Wealth Management revenue increased 14% to $5.1 billion. Record management and other fees of $3.6 billion reflected higher average assets under supervision. Incentive fees totaled $587 million, while private banking and lending revenue increased 20% sequentially to $827 million.

Total assets under supervision reached $4.1 trillion. Wealth Management client assets rose to a record $2.1 trillion, supported by $47 billion of long-term net inflows. Management said 2026 Wealth Management inflows were annualizing at 12%, above its 5% target.

Alternative assets under supervision totaled $491 billion. Third-party alternatives fundraising reached $37 billion in Q3 and $122 billion year to date. Goldman Sachs also announced agreements to acquire NEOS, which had approximately $35 billion in assets under supervision, and LCN Capital Partners to expand its ETF and private real estate capabilities.

Management Guidance

• Goldman Sachs now expects approximately $150 billion of alternatives fundraising for full-year 2026.
• Management expects incentive fees to remain elevated in Q4 based on its current outlook.
• The company continues to expect a full-year effective tax rate of approximately 20%.
• Goldman Sachs expects another meaningful charitable contribution in Q4. Together with the Q3 contribution, the company said these actions would pull forward at least five years of planned charitable giving.
• Management identified a 50-to-100-basis-point CET1 operating buffer and said the current 100-basis-point buffer provides capacity to support client activity.
• The year-to-date compensation ratio of 30% represents management’s current best estimate for the full year, subject to business performance and compensation decisions.

Risks and Areas to Watch

Higher oil prices, renewed geopolitical tension, inflation concerns and rising bond yields increased uncertainty during the quarter. Management noted that abrupt interest-rate moves could slow capital markets activity, even though it continued to characterize the current environment as favorable.

Goldman Sachs sees substantial financing demand from AI infrastructure investment but stressed that the trajectory is uncertain. Management cited estimates that the U.S. data-center buildout could require more than $10 trillion through 2032 and warned that higher financing costs, project economics and capacity constraints could affect returns and project viability.

The firm also highlighted the need for disciplined underwriting as AI financing requirements become larger and more complex. Broader AI risks include the pace of frontier-model development, insufficient safeguards and the need for testing, monitoring and human accountability.

Credit quality remained strong overall, according to management, although Q3 provisions included higher impairments on several individual, noncorrelated exposures. Private-equity sponsor M&A activity also remained below historical averages as sponsors delayed exits from 2020 and 2021 vintages.

Analyst Q&A Highlights

• Trading sustainability: Management identified no unusual or one-time factor behind the quarter’s markets performance. It expects tokenization and other market-structure changes to improve efficiency over time, although current activity remains small.
• Investment banking cycle: David Solomon described the capital markets environment as top quartile rather than the exceptionally strong conditions seen around May and June. He said M&A dialogue and the backlog remained robust despite higher rates and several delayed IPOs.
• AI financing: Goldman Sachs expects AI investment to draw capital from public and private debt and equity markets. Management emphasized the firm’s ability to advise, originate, structure, distribute and invest across these channels, while remaining selective on risk.
• Financing durability: Management acknowledged that equity financing is cyclical during market deleveraging. However, it views growth in tradable assets, global GDP and market capitalization over three-to-five-year periods as supportive of a larger recurring revenue base.
• Capital allocation: The firm intends to prioritize client deployment, sustainable dividend growth and repurchases of excess capital while maintaining appropriate CET1 and supplementary leverage ratio buffers.
• Leadership: Solomon said there is no CEO succession transition or timeline underway and that he and the board remain focused on the firm’s strategy and earnings growth.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good morning. My name is Katie and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Third Quarter 2026 Earnings Conference Call. On behalf of Goldman Sachs, I will begin the call with the following disclaimer. The earnings presentation can be found on the Investor Relations page of the Goldman Sachs website and contains information on forward-looking statements and non-GAAP measures. This audio cast is copyrighted material of the Goldman Sachs Group, Inc. and may not be duplicated, reproduced or rebroadcast without consent. This call is being recorded today, October 13, 2026.

I will now turn the call over to Chairman and Chief Executive Officer, David Solomon; and Chief Financial Officer, Denis Coleman. Thank you. Mr. Solomon, you may begin your conference.

David Solomon

Thank you, operator. Good morning, everybody. Thank you for joining us. We delivered very strong performance in the third quarter, generating net revenues of $18.7 billion, the second highest in our history. Earnings per share of $17.01, an ROE of 18.7% and an ROTE of 20.5%. Our quarterly results included the impact of an accelerated charitable contribution. Excluding that contribution, quarterly EPS would have been approximately $18 and ROE and ROTE would have been approximately 20% and 21.5%, respectively. For the year-to-date, we delivered record revenues, driving an ROE of 20.7% and an ROTE of 22.4%. While the third quarter began with optimism around the potential resolution of the conflict in the Middle East, renewed geopolitical tensions and continued disruption of energy flows added complexity to the outlook, increasing oil prices, reigniting inflation concerns and driving bond yields higher.

Against this backdrop, the Fed raised rates in September for the first time in 3 years, with markets pricing in approximately 75 basis points of additional tightening in this cycle across the U.S., U.K. and Europe. Despite these crosscurrents, the health of the underlying U.S. economy has remained solid with strong corporate earnings growth, GDP growth of 2.2% and a very resilient labor market. In complex environments such as these, clients rely on device, execution, energy mediation expertise of Goldman Sachs to navigate uncertainty and advance their most important strategic priorities.

In Global Banking and Markets, we generated the second highest revenues in our history within investment banking advisory revenues were a record, and we maintained our long-standing #1 position in M&A, advising on $1.5 trillion announced transactions for the year. We maintained our year-to-date lead over our closest peer of approximately $430 billion, the largest lead we've ever had as clients turn to us for advice on significant transactions, including Hugging Face's $13 billion sale to NVIDIA and Integer Holdings $6 billion sale to KKR. As you remember, we entered the quarter with our highest backlog in 5 years. And even with exceptionally strong revenue production in the quarter, our backlog remains very robust, reflecting the strength and breadth of client engagement across our leading investment banking franchise.

In equities, we delivered our second best performance after last quarter's record results. with strength across both intermediation and financing. And fifth, we remain steadfast in supporting our clients' global risk intermediation needs across asset classes amid sharp moves in rates and increased volatility in commodities. Importantly, financing activities have become a larger and more durable component of our markets businesses, representing over 40% of FICC and Equities revenues year-to-date. This progress reflects strong client demand prudent balance sheet deployment and continued execution against our strategic priorities, including deliberate multiyear investments in Asia, which we highlighted earlier this year as an opportunity to drive further share gains.

This dynamic market backdrop has also reinforced the importance of trusted advice and diversified investment solutions for asset and wealth management clients. Our scaled and durable platform brings together leading investment capabilities across public and private markets and delivers them through deep institutional relationships, our ultra premier high net worth wealth management franchise and our expanding third-party distribution network. The strength of this platform continues to drive exceptional growth at scale. In the third quarter, management and other fees increased 22% year-over-year to a record $3.6 billion and surpassed $10 billion for the year-to-date.

Our assets under supervision reached another record of $4.1 trillion, supported by $97 billion of long-term net inflows, representing our 35th consecutive quarter of inflows. In Wealth Management, $47 billion of long-term net inflows contributed to record client assets of $2.1 trillion. For 2026, Wealth Management long-term net inflows are annualizing at 12%, well ahead of our 5% target, which underscores the strength of our client relationships built on trust and long-term performance. In alternatives, we are driving strong growth with alternative assets under supervision up 26% year-over-year to a record $491 million.

We continue to see strong momentum in fundraising with $37 billion raised in the quarter, driving a total of $122 billion in fundraising for the year-to-date, reflecting investor demand for experienced investment managers. Considering the strength, we now expect full year fundraising of roughly $150 billion. Given the sustained levels of investment performance for clients, our leading asset and wealth management business remains very well positioned for continued growth amid attractive secular tailwinds. At the same time, we are also inorganically accelerating growth and building a stronger platform with a better product offering for clients.

In August, we announced agreements to acquire NEOS, a market-leading a market leader in derivative income ETFs with approximately $35 billion in AUS at quarter end and LCM Capital Partners, a leading triple net lease investment manager. The NEOS acquisition will bring our global active ETF assets under supervision to over $90 billion, establishing Goldman Sachs among the top 8 providers by assets under supervision and top 6 by revenue. While LCN broadens the range of private real estate investment solutions we can offer. Importantly, these acquisitions also bring talented and entrepreneurial teams to Goldman Sachs. We remain focused on opportunities that enhance distribution, deepen investment capabilities and add products to strengthen asset wealth management.

Our bar for strategic financial and cultural fit remains very high, and we will continue to allocate capital dynamically and with discipline as we drive growth. All in, our record year-to-date revenues are the result of years of focused execution that have strengthened our market-leading businesses and increased connectivity across the firm as we harness the power of One Goldman Sachs. Importantly, we have created a higher revenue base with our more durable revenues have more than doubled since 2020 Investor Day and now representing approximately 45% of revenues for the year-to-date. The increased durability coupled with our expense discipline and prudent capital management enhances the resilience of our earnings and supports higher returns through the cycle, providing Goldman Sachs with an even stronger foundation for growth.

Looking forward, though uncertainty persists, corporates and investors recognize that standing stop can be a competitive disadvantage. Clients are taking action to modernize operations, secure critical capabilities and reallocate capital towards the highest return opportunities. All of this is driving demand for M&A, capital formation, financing, risk management and advice playng directly to the strength of our franchise. An ongoing theme has been the growth in AI infrastructure investment. Recent studies estimate that the U.S. data center build-out could require north of $10 trillion of investment through 2032 and averaging roughly 3.6% of U.S. GDP annually. And our conversations with clients, demand for compute significantly exceeds supply at the moment. creating opportunities to help develop financing structures to meet that capacity shortfall.

Our differentiated financing, distribution and investing capabilities position us to play a meaningful role in the mobilization of capital and supporting client activity. While we are proud of the privileged position we play in the AI investment cycle, no one knows how the demand for capital and compute will evolve as the broader AI ecosystem matures. That will only become clearer as technology and markets continue to develop. This uncertainty reinforces the importance of remaining vigilant around the types of activity we finance and how we manage risk as we support our clients. We are highly selective about the risk we underwrite and the capital we commit, particularly as client financing needs become larger and more complex.

Beyond these financial risks, we also recognize the broader concerns around the accelerated pace of AI technology and the unchecked advancement of frontier models. Like other transformative technologies, AI presents significant opportunities but also significant risks that must be carefully assessed and managed. However, the choice is not between hoping progress and moving forward without guardrails. We must enable innovation and also demand responsibility. The experience of the financial services industry has demonstrated the value of rigorous testing independent review and continuous monitoring and clear human accountability. These principles implied in ways that reflect the unique characteristics of AI can help build the trust and confidence needed to deploy the technology responsibly at scale while companies, developers and governments work together to establish appropriate safeguards.

All in, we continue to see meaningful opportunities ahead of us. We are incredibly well positioned given our relentless focus on serving our clients while remaining vigilant to emerging risks in this dynamic environment. Our culture of teamwork, excellence and partnership remains a key differentiator that has enabled us to adapt, innovate and execute through a range of environments. I've never been more confident in our ability to create long-term value for shareholders by making the right investments to grow the firm and generate sustainable earnings growth.

With that, I'll turn it over to Denis to walk through our financial results in more detail.

Denis Coleman

Thank you, David. Good morning, everyone. Let's start with our results on Page 1 of the presentation. In the third quarter, we generated net revenues of $18.7 billion, earnings per share of $17.01, which drove a quarterly ROE of 18.7% and ROTE of 20.5%.

Turning to segment performance, starting on Page 3. Global Banking and Markets revenues were $13.5 billion in the third quarter, our second highest quarterly revenues, contributing to a segment ROE of 23.5% for the year-to-date.

Moving to Page 4. Advisory revenues of $1.7 billion reached a quarterly record and rose 18% year-over-year, driven by higher volumes. For the year-to-date, we maintained our #1 league table position for announced and completed M&A volumes. In equity underwriting, revenues of $666 million rose 43% year-over-year on strong IPO and secondary offerings activity. In debt underwriting, revenues were $904 million, up 15% year-over-year driven primarily by stronger investment-grade activity. Year-to-date, we ranked #1 in equity underwriting, #2 in leveraged loans and #3 in high-yield debt underwriting. Even amid very strong accruals in the quarter, our investment banking backlog remains very robust as strong revenue realizations in advisory were largely offset by solid replenishment and equity underwriting.

Year-to-date sponsor share of announced M&A remains below historical averages, presenting further upside when activity picks up. FICC net revenues were essentially unchanged year-over-year. Intermediation revenues declined 7% as lower results in mortgages, rates and credit were largely offset by strong performance in currencies and commodities. Financing revenues increased 14% to their second highest level, driven by strength in mortgages and structured financing. Equities net revenues were $6.4 billion, up 72% year-over-year, representing our second best quarter driven by strong performance in both intermediation and financing. Equities intermediation revenues rose 52% to their second highest level driven by strength in derivatives.

Equities financing revenues rose 96% to a record driven primarily by elevated average prime balances and strong activity across Asia. Demand for equity financing continues to exceed available industry capacity, supporting attractive pricing and allowing us to remain selective in deploying resources. Following significant multiyear investment, our focus is increasingly on optimizing a diversified global portfolio guided by our risk management framework, client relationships and returns. More broadly, we continue to see structural tailwinds for the growth in tradable assets and the increasing financing needs associated with those assets, which have helped to support sustained industry growth and equities financing over time. Year-to-date, total financing revenues of $12.7 billion were a record and represented over 40% of combined FICC and Equities revenues.

As David mentioned, growth in financing revenues has contributed to greater durability in FICC and Equities and is underpinned by a robust risk framework that includes diversified exposures, limits, concentration management and comprehensive stress testing.

Let's turn to Page 5. Asset & Wealth Management revenues were $5.1 billion, up 14% year-over-year. Management and other fees rose 22% year-over-year to a record $3.6 billion, reflecting the impact of higher average assets under supervision. Incentive fees were $587 million. Through our ultra high net worth wealth management franchise, we provided clients early access to a high-growth investment opportunity and recognized incentive fees following the company's IPO. Based on our current outlook, we expect incentive fees to remain elevated in the fourth quarter. Private banking and lending revenues were $827 million, up 20% sequentially, driven by higher net interest from consumer deposits. Loan balances were up 6% to $51 billion. Investment revenues were $50 million, given the timing of certain monetizations following a strong second quarter and certain markdowns.

Now moving to Page 6. Total assets under supervision ended the quarter at a record $4.1 trillion, supported by $97 billion of long-term fee-based net inflows, marking our 35th consecutive quarter of long-term fee-based net inflows. Wealth Management client assets reached another record of $2.1 trillion with $47 billion of long-term net inflows.

Turning to Page 7. Alternative assets under supervision totaled $491 billion at the end of the third quarter, driving $860 million in management and other fees, the best performance since our 2020 Investor Day. Gross third-party alternatives fundraising was $37 billion for the quarter and $122 billion for the year-to-date.

On Page 9, firm-wide net interest income was $3.8 billion. Our total loan portfolio increased 6% from the prior quarter to $276 billion, reflecting broad-based growth across the portfolio. Our provision for credit losses was $368 million. While overall credit quality and portfolio performance have remained strong, our provisions reflected certain impairments across our portfolio as well as overall growth in lending.

Turning to expenses on Page 10. Total operating expenses were $11.3 billion for the quarter. For the year-to-date, total operating expenses were $33.4 billion for an efficiency ratio of 59.4%, improving 270 basis points in the prior year and in line with our target. Our year-to-date compensation ratio net of provisions was reduced to 30%. We remain committed to paying for performance and delivering operating leverage for shareholders. Quarterly non-compensation expenses were $6.2 billion, 30% higher year-over-year, driven largely by higher transaction-based expenses. Additionally, given the strong pull-through of incentive fees this quarter, we made a tax-efficient charitable contribution of approximately $450 million as part of a planned acceleration of our philanthropic efforts.

We also expect to make a meaningful contribution in the fourth quarter. Together, these actions will pull forward at least 5 years of planned charitable given. The impact of our charitable contributions on quarterly EPS was approximately $1, while the impact on ROE and ROTE was approximately 1.1 percentage points each. Our effective tax rate for the year-to-date was 20.4%. And for the full year, we continue to expect an effective tax rate of approximately 20%.

Now on to Slide 11. Our common equity Tier 1 ratio was 12.4% at the end of the third quarter under the standardized approach, 100 basis points above our current capital requirement of 11.4%. Regarding recent regulatory developments, we welcome the Federal Reserve's rule finalization to enhance the transparency and accountability of the CCAR stress test and reduce the volatility of capital requirements. We also recognized the progress of the Basel III end game and G-SIB re-proposals and are hopeful for finalization by the end of the year. Collectively, these developments represent meaningful progress towards a more balanced and risk-sensitive regulatory capital framework that preserves the strength and resilience of the banking system.

As the rules are finalized, we support appropriately calibrated requirements that are aligned with the risks firms actually take and look forward to the timely completion of these reforms. We expect regulatory focus to soon shift towards liquidity regulation reform. We currently have over $570 billion in average global core liquid assets, representing approximately 25% of our total assets, and our liquidity coverage ratio is among the highest in our peer group. In the quarter, we repurchased $3 billion of our common stock and paid $1.5 billion in dividends. We continue to have significant capacity to deploy capital prudently and service of clients while maintaining an appropriate buffer.

In conclusion, our third quarter performance reflects the strength of our client franchise, which has been bolstered by years of strategic execution. We have built market-leading franchises, deep relationships and a higher and more durable revenue base. We remain focused on delivering strong returns while continuing to invest in our people, technology and client franchises to drive long-term earnings growth at a liver for our shareholders.

With that, we'll now open up the line for questions.

Operator

[Operator Instructions] We'll take our first question from Glenn Schorr with Evercore ISI.

Question-and-Answer Session

Glenn Schorr

One -- first one on trading and markets, the results are nothing short of awesome. There's a short-term and long-term question I have. The short term is just simple. Is there anything unique in the quarter like related situational awareness, anything like that would contribute to the course such that we don't over model in the fourth quarter? But the bigger picture question I want to ask you is there's so many developments going on, tokenization, Agentic trading, D5 volts, prediction markets. All these theoretically would nip at the core of your great markets business, but obviously, you're not standing, so maybe you could talk about where you're making investments and how you see some of those things, how we should think about that in conjunction with your markets platform.

David Solomon

Sure. Thanks, Glenn. On the first point, I don't see anything that I would call out. Denis, do you...

Denis Coleman

No, I agree with that.

David Solomon

Yes, I don't see anything I'd call out just on the first thing just to put that aside. On your second question, obviously, we've seen market structure evolve with technological advancements over long periods of time. We've talked about that for a long time. And as a leading market maker and risk intermediary, we have to continue to invest in technologies, infrastructure capabilities to make sure we're supporting our clients at the cutting edge, and I think we'll -- we continue to do that. I know you'll remember, Glenn, it was nothing long ago that people were concerned about electronification and equities trading and its impact on our business. But as we sit here today, the opportunity set for us is greater than what anyone could have contemplated when you look at our equity revenues and the way we adjusted and the way the business has evolved.

Today, tokenization is obviously an important trend we see it across asset classes. We were publicly supportive of Clarity passing wasn't perfect, but we thought it would be good to give the market more clarity, no contended and ensure investor protection. But in the absence of that, we're already seeing agencies big steps to provide clearer rules to the market and we are engaged in those dialogues. We continue to invest and closely monitor the developments, both for opportunities but also for risk. The developments are obviously creating more products, greater activity potentially new clients, broader distribution channels. And naturally, when you look at these things, they expand the TAM for our business, and that's one of the things that's interesting and exciting.

At the same point, we remain very focused on ensuring that we're well positioned to serve our clients as these markets evolve. We've been investing in companies in the digital asset or a market infrastructure space for years and remain very focused on that. We've been building capabilities such as the GS app, where we were early and building our own rails for digital assets. We've tokenized bonds. We have a number of money market funds that are tokenized real estate for certain clients. And so we've been focused on trying to be at the edge of some of those activities, although I'd say broadly, those activities are very small at this point. And we're participating in a range of market developments. In July, we participated and the launch of DTCC's tokenization service, and we're now actively assessing scalable use cases that we could put within it.

We expect, over time, the underlying technology can drive greater efficiency, automation, streamline processes, reduce costs, take away friction, improve liquidity across asset classes. And so we're going to remain focused on this. I think you're right to raise it is something that requires attention. But I'd say the activity so far is small and at the margin, but we're going to continue to have resources thinking about how these changes can evolve over time. And I think it's one of the reasons when you think about, for example, electronification, we've managed to manage disruption and change in the equity business so well. And so we use that as a little bit of a guideline. So I hope that's some helpful color.

Glenn Schorr

Yes, you haven't put any thought into it. That was very helpful. So I've covered you guys since, I guess, the IPO, I've seen some transitions in management and Goldman just gets stronger each step of the way. This one seems to be being managed pretty methodically. There was just some articles recently that talked about an acceleration. So I don't know, David, if you want to address any of that just to keep the record straight, I appreciate it.

David Solomon

No, sure. And I appreciate the question because some of the articles, the articles [indiscernible]. I'm going to just start with Glenn. I'm super pleased with the progress the firm has made since we laid out our strategy at our Investor Day the execution. This team has worked to really grow the firm significantly. And I think we've really made it increasingly durable. And I have to say, at the point we're at now, where we see the benefits of the effort that the broad team has made I'm really enjoying the job, but more importantly, as a team, we're super excited about what's in front of us in the coming years and how we can continue to grow the franchise and really accelerate the earnings potential of the firm. So I just want to be clear, there is no succession transition or time line underway at Goldman Sachs. The Board and I are singularly focused on our strategy to grow the firm and continue to serve our clients with excellence.

Operator

We will take our next question from Erika Najarian with UBS.

L. Erika Penala

David, you answered this question on your -- in your prepared remarks, and maybe the more nuanced way to ask it is, there has been a lot of fears in the investor community that the bond market route globally was going to have a chilling effect on activity levels. And give us sort of how you framed the pipeline, maybe talk about how discussions have evolved or taking into account higher long-end rates and if that's a factor? And just a compound question, just have to be on TV in 5 seconds. If we think about the capital consumption in the fourth quarter, clearly, capital came in 50 basis points lighter. You still have plenty of excess. JPMorgan mentioned that the fourth quarter should be super active in trading and should not have a seasonal slowdown? How should we think about capital consumption going forward?

David Solomon

Well, just quickly and -- quickly on capital consumption. We talked about running with a 50 to 100 basis point buffer. We're at a 100 basis point buffer. The firm has very good earnings momentum, so we generate capital. We feel comfortable with the fact that we have adequate capital to deploy in an active quarter in the fourth quarter. And so we feel like we're managing that well. We continue to feel very nimble about our ability to manage our capital allocation effectively clients first than when we can't deploy back to shareholders.

On the first topic, just around rates and the effect in activity, we did see in the quarter a very meaningful move in rates. I think from the beginning of July to now, we've seen a 75 basis point move on the 10-year, approximately don't hold me exactly to that. But a 75 basis point move on the 10-year. But I think one of the things that's lost is a historical perspective on-term treasury premium because we've really operated since the financial crisis and a rate in an environment where rates are fundamentally low is a 64-year-old guy, I kind of look back at the last 64 years, and a 5% 10-year treasury doesn't scare me in terms of an operating environment. It's the overwhelming periods of time in my life, the 10-year treasury has been higher than the level that it's in. And so we can have very, very effective capital markets with that.

What creates headwinds for markets is when you have very, very abrupt moves. Yes, we had a meaningful move in the quarter were probably some days when it was abrupt, but you've got other things going on that are very, very important. We have a very, very strong underlying economy. Economy continues to be very, very resilient despite some of the headwinds. We have an extraordinary tech super cycle. I think we have a regulatory environment that is really encouraging strategic activity to continue to grow scale. And you put these things all together and you balance it, and I think it's a pretty good environment. So I know people looked at the quarter and felt that it felt a little different than it did in the second quarter. And I think that's fair.

I would say that if I go back to the end of May or June, I would call it like a top, top decile environment for kind of market activity and capital markets activity. but now on a top quartile environment, and that's still really, really good when you think about long periods of time. So we feel quite good about the activity levels. Obviously, if there was a lot more interest rate volatility that could create headwinds, but we'll watch markets carefully. And at the moment, as we look at activity levels, they feel good.

Operator

We will take our next question from Ebrahim Poonawala with Bank of America.

Ebrahim Poonawala

I guess first question, David. I think Hock Tan from Broadcom, I think you were speaking overnight. And he kind of questioned the sustainability of like the AI CapEx financing. And just you were obviously part of the group with Jensen during the quarter. One, do you share that concern that the real choke point for AI CapEx will be financing, especially given moving higher, it's unclear what the returns look like. Frame that for us given you probably have one of the best visibilities on what the appetite looks like.

David Solomon

I think, Christian, it's -- I mean it's a very, very good question -- Graham, I'm sorry, yes, I apologize. I'm looking at a screen here.

Ebrahim Poonawala

I have been called a lot worse in life so it's okay.

David Solomon

Okay. I apologize is Christian's next. And so I looked at the screen quickly, I apologize. So Ebrahim, it's a really good question. And I'm probably going to disappoint you on my answer, which is I don't know and nobody knows. What I would say, and you saw it in our remarks, we are extremely conscious of the fact that the expectations for the quantum of financing that's necessary to build out the data center infrastructure in the United States based on what people are predicting is quite significant. And over time, there is risk there is risk to pressure on crowding out the size of scale. Not every project is going to be received as well. .

And so we feel very lucky, and I said this in the prepared remarks, we sit in the center of that ecosystem, but we also recognize we have an extraordinary obligation to be very disciplined about what we underwrite. And I just -- I think generalized comments about the direction of travel and what will happen. I think we've got to be very cautious about that. There is going to be a lot of financing to do, and we're going to be in the middle of that. it may be, over time, as the finance needs grow, that there's pressure on rates and that will affect the returns and the viability of certain projects. It's our job as an intermediary, as an asset manager, as a capital provider to sort through that and make prudent decisions. And I think we're very good at that, and we will.

But one thing is for clear, there's a lot of demand for compute at the moment. The supply is not coming to balance, more is going to get built, more financing is going to be necessary. There will be a point in time when this recalibrates, resets, for sure. And when that does happen, of course, there will be some bumps. But it's very, very hard to predict that. And I think broad assertions that any of us know the direction of travel, how the technology will be evolved, how it will be deployed that's just an unknown we have to live with, but it's an exciting time because there's going to be a lot of really interesting things to do around that.

Ebrahim Poonawala

Got it. And I guess one other question. Improving and durable earnings has been a big focus for you. Help me also this like when we look at the growth in prime and equity financing, you could make the argument that it's adding to the cyclicality of the business if they're like deleveraging among hedge funds, et cetera. And sure, like I'm not talking about quarter-to-quarter volatility, but how should we think about equity financing actually making these earnings more durable versus adding to the cyclicality? Like how would you sort of think through if you could help us?

David Solomon

Yes, sure, Christian. I mean, Ebrahim, again...

Ebrahim Poonawala

You must love Christian, I guess.

David Solomon

No, I actually love Ebrahim and Christian. I love everybody. So I think the way to think about this is we all have to -- this is the way we think about running the firm, you have to step out a quarter-to-quarter, okay? None of us here as we risk manage in our prime business are confused. Equity markets go up, equity markets come down. okay, when equity markets come down, okay, there's a deleveraging, okay? And the size of the prime business because of the needs that our clients have to be financed with a smaller equity market, a smaller market cap there's going to be some cyclicality to that. However, if you step back and you get out of quarter-to-quarter movements and you fundamentally believe in growth in the world and therefore, GDP growth in the world, and therefore, growth in market cap and technology innovation over any 3- to 5-year period, the durability of the growth of that business at some baseline is going to be very attractive for Goldman Sachs. .

And so when you step out of the quarter and you think over 3, 5, 7 years, and you've really seen this, look, we've grown our revenues over the last 5 years since 2022 by 11% compounded on the top line. I do not believe we're going to grow our revenues by 11% compounded on the top line for the next 5 years. There will be steps and starts as equity markets move around. But what we're trying to prove out is that the durable base is much bigger. It's a much more diverse business. And fundamentally, it's very correlated to GDP growth, and equity market cap growth over time. And if we stop looking quarter-to-quarter and stop looking and start looking at 3- to 5-year period and look at the earnings growth that's driven, you get a very, very constructive result.

Operator

We'll take our next question from Christian Bolu with Autonomous Research.

Chinedu Bolu

And feel free to call me Ebrahim.

David Solomon

I was always going to call you Ebrahim. I was going to call you Ebrahim just to level the playing field.

Chinedu Bolu

Yes. I guess first one, David, just on the IB cycle here. I'd love to get some color on where you think we are in the cycle. The macro seems to be marginally more challenging, higher rates a bunch of IPOs get pulled. We probably get a change in the political climate post U.S. midterm elections. Your backlog seemed impressive, but they did pull back a little bit. So just give me a sense of where you think we are in the cycle, have we peaked or is there more to go?

David Solomon

I know everybody wants to call the peak. It's hard to call the peak, but let's just step back. And I want to back to something I said just a little bit earlier, I still think for capital markets activity is a top quartile environment. For strategic M&A, there's an enormous amount of dialogue that continues. Our backlog is incredibly robust. It's fair to say that we had enormous accruals in the quarter, but if you listen to our prepared remarks, we were very forward about how robust the backlog remains. Capital markets activity is still good. I think one of the things that gets lost. There are obviously a handful of IPOs that didn't move forward.

But when you look at ECM revenues for the quarter and for the last few quarters, they're running meaningfully above both 5-year and 10-year averages. So that's a good environment. 5-year, 10-year averages would be 50% kind of capital markets environment, running meaningfully above 5- and 10-year averages is a better environment. And so I think we're still in a very good capital markets environment. I think one of the things that happened with a handful of the IPOs, when people do IPOs, they make a decision months in advance to move forward, and they have discussion around what the valuation expectation is. And the investors have an expectation. And so IPOs that came in September were really the result of conversations in May and June around valuation expectations things got a little bit softer in September. If the IPO market was wide open. It's just if you expected a valuation and you got something 10% to 15% less, you might choose not to go forward, you might choose to wait. But the IPO market is still in pretty good shape.

I'd say capital markets activities are strong. There's no question the overall macro environment is a little bit more complicated. The rates environment a little bit more complicated, but the activity levels that we're seeing are still pretty good, but we'll obviously have to watch through the quarter. I think over technology innovation and the AI infrastructure activity is a real good balance for capital markets activity on a go-forward basis. It doesn't mean there won't be bumps in the quarter ahead. But when I look, we're certainly operating in a very good environment for capital markets and investment banking activity at the moment.

Chinedu Bolu

Okay. Very helpful. Maybe just on balance sheet and capital management. Clearly, you're seeing tremendous balance sheet demand as evidenced by the robust growth in your financing business. I am a little bit surprised that you are still buying back a ton of stock at 3x tangible especially as your SLR is lower than peers. So maybe just talk through how we should think about capital management priorities as you move into 2027.

Denis Coleman

So Ebrahim, thank you. Thank you for the question. Times 2.

David Solomon

That's a good CFO.

Denis Coleman

So this is all taken against the backdrop that David has outlined. We're optimistic about the opportunity set. We made decisions over the course of this year following some of the regulatory capital relief to expand our deployment into the client franchise. We also happen to buy a bunch of stock as well. We're generating significant earnings that enabled us both to buy back the stock, buy down our share count give us capacity to continuously and sort of systematically buy down our shares outstanding over time gives us more capacity on the follow, but we were also able to make decisions to fuel the client franchise, which ultimately is delivering the results that we're talking about here in the third quarter.

And I think as we head forward into 2027, I think our -- you should expect our approach to be similar. We will deploy into the franchise as a matter of priority. We do expect to continue to invest in the sustainable growth of our dividend. It's obviously up 25% year-over-year. It's now at $5 a share. It was $4 a year ago, 5 years ago, it was $2 a share. So we've been consistently investing in the growth of our dividend. That remains important. And obviously, with excess we'll return it to shareholders and make sure we have the right buffer to operate the firm. So I think it's a consistent approach to our deployment, including into 2027.

Operator

We will take our next question from Mike Mayo with Wells Fargo Securities.

Michael Mayo

I guess more talk about a headwind to what you described as an extraordinary super cycle as it relates to power, labor rates. CapEx has gone from billions to trillions, the climate. And so is funding a constraint for this tech super cycle? And how do you -- is your conviction as strong as it was, say, 3 or 6 months ago? And then on the positive side, you talked about the growth in tradable assets globally, you're spending in Asia what has been that growth? What are your numbers around that?

David Solomon

So on the first part, Mike, you're talking about just enough capital in the markets to fund the growth of all this technology expansion. Are we talking about our funding -- I assume you're talking about just general capital availability to fund the significant AI infrastructure growth.

Michael Mayo

Yes. I mean, if bond markets go on strike or if rates go up too much or just the hiccup the political hiccups, the pushback against data centers I know it's not a straight line up, but you still describe it as a tech super cycle. Do you think this is a strong and tech super cycle as you did 6 months ago, for example, given just some of the headlines that we see and the reaction of from the technology companies?

David Solomon

Yes. I do think it's a very strong technology super cycle, Mike, and there's no there's no way to step away from that, okay? The things that you highlight, obviously, if there are other factors that create significant interest rate volatility and push rates higher, that will have an impact on the pace of build-out and what projects get done and how they get done. If there's more geopolitical volatility in the world, that can have an impact. localized political volatility around data centers. We've got an election coming up. It will be interesting to see. Obviously, there's a lot of political discussion coming into an election, but then you also have to see how states and localities are coming out of elections. All these things can create volatility and there's uncertainty around them.

So no one knows the exact line of travel. But at its base, this technology is real. It's going to accelerate in terms of its deployment. There's going to be infrastructure built around it. That's going to be quite significant. Hopefully also, and I think this is the case, there's going to be guardrails and government processes that help build trust around it. There is a lot of responsibility that goes to enterprises that are deploying it around making sure it's deployed correctly. But all of that is generally constructive for our business. Now I can tell you lots of things that can go wrong and slow it down. But there's uncertainty around that, but that's kind of part of our job and the market's job is to kind of intermediate that and decide as time goes on, the trajectory of that line. But this is real and it's significant and it's not going away, in my opinion.

Denis Coleman

And then Mike, I think on the second part of your question, as the world continues to expand as we expand our opportunity set in Asia, something we've been strategically getting after for a number of years, you're seeing some of the results of that investment and the expansion of clients and markets in places that we can actually trade and finance different assets. If you look at our earnings release, you can see the geographic mix of our revenues. You can look back a year, you can look at the second. You can look at the year-over-year, you can look at the sequential for the firm, and there's a very meaningful change in Asia's representation of aggregate firm-wide revenues. And I think it's fair to say a lot of that change in the geographic mix of revenues in the firm is being driven by equities, activity, equity financing activity. So those numbers give you a decent picture for the expansion of that opportunity set.

Michael Mayo

And then completely separately, just there are a lot of articles, headlines written about you David and succession. And clearly, there's something that came out from Goldman Sachs, but what are your plans first staying around at Goldman as CEO?

David Solomon

I think you might not have been on when earlier when Glenn Schorr asked that question, Mike. And the way -- the way I answered I'll just repeat what I said. I mean, I talked a little bit about the work we've done, the progress we've made, how much I'm enjoying it and also the excitement of the leadership team we have about the years ahead. And I said, to be clear, there's no succession transition or timeline underway at Goldman Sachs. The Board and I are singly focused on growing the firm, growing earnings, serving our clients. So that's what I said earlier on the call.

Operator

We will take our next question from Steven Chubak with Wolfe Research.

Steven Chubak

So David, I wanted to double-click a little bit further into the revenue opportunity tied to the financing of the digital infrastructure build-out. Your firm is actually uniquely positioned to underwrite financing activity, both in the private IG market as well as the public debt market. As we get deeper into the AI CapEx cycle, I wanted to get your perspective as to how you see activity migrating from the public to private markets how you're positioned competitively to compete in that private IG space? And how does that impact some of the revenue considerations or economics if that activity does in fact, migrate away from the public debt space and into the private sphere?

David Solomon

Yes. I mean I'll make a couple of comments, and Denis might have a couple of comments here, too. But again, I know everyone wants an absolutely clear answer on the direction of travel of all of this. the capital demands are significant, and it's going to require significant capital deployment from the public markets, both equity and debt and from the private markets, both equity and debt. And we're seeing that. I think one of the things that makes Goldman Sachs so unique is we're the only firm that sits kind of at the epicenter of having an ability to advise on these projects and the financings and how they should come together. An ability to be an originator and a structure of these transactions and distribute them to other institutional sources of capital. .

And in addition, have a very broad asset management platform that includes both public and private pools of capital that can be coordinated into these transactions. And there's nobody else that has that positioning. So we feel it's a firm that we're seeing a lot, and we sit in a very privileged place in the ecosystem. There's a significant amount of activity. It's different for different entities. It depends on who the customers and the offtakes are in a lot of the projects, which has a significant impact on the financing rates as to where you can go. There's a big difference from something that's really generated to serve hyperscaler versus some of the neo clouds. And so all of this goes into the equation, but we feel very well positioned to bring the full range of services and participate actively, and we still see an enormous amount of activity. Denis, do you want to add to that at all?

Denis Coleman

No, I think it's well said. The only thing I would add is if you step back and you also think about our banking franchise, the coverage footprint that we have, this cycle is different from prior cycles and that the largest, biggest companies driving the cycle have significant capacity to use free cash flow to finance this. And so there's lots of discussions with how you advise those large companies themselves, how much debt they should issue, how much equity they should issue, what's their rating appetite, what are the structures of the financing facilities. So you have to start with those people that are actually driving the investment super cycle. Then you move into the public and private debt and equity markets. We obviously, through capital solutions, have the capacity to underwrite and distribute to also put certain types of financing structures on our own balance sheet.

And then we've been growing our AWM business, our private IG business, as you referenced, quite substantially. That also can participate in the overall growth. And then if you think about the entire ecosystem, the supply chain is super complicated. There are a tremendous number of different companies that operate and you can finance the different companies at each point in the supply chain across different markets around the world. And given the scale of capabilities that we have, we just feel that we're well positioned to assist all across the supply chain and driving growth of the investment cycle.

Steven Chubak

No, I appreciate really all that detail and the perspective that you offered. Maybe just a quick follow-up on the SLR. Given financing activity is much more leverage-intensive, you guys have obviously seen outsized gains on the financing side. Speak to where you're comfortable running under the SLR constraint while supporting continued balance sheet expansion? And specifically, your appetite to grow in more nascent financing areas such as tax aware strategies, just given your leading position in wealth in the RIA custody space would be a natural extension of your current financing capabilities?

Denis Coleman

Sure. So you've obviously seen the change in how we've run our SLR ratio on a year-to-date basis. I think it's fair to say that the biggest delta, the largest sort of balance sheet extension is behind us. We're now migrating to a zone where we run a buffer in SLR, much like we run in CET1 ratio. So we feel like we have the requisite capital we need to support the growth in client activity as we head into the fourth quarter, but I wouldn't expect a significant movement from here. And then in terms of other strategies that we have across the overall AWM franchise, we're exploring and working on a number of those different strategies that you referenced.

Operator

We'll take our next question from Manan Gosalia with Morgan Stanley.

Manan Gosalia

Earlier on the call, you spoke about the year-to-date sponsor share for announced M&A being below the historical average. I guess what's your outlook for that business, given the uptick in rates? Are you seeing any pullback, any reluctance for some of those deals to come through into the market?

David Solomon

Yes. I appreciate the question, Manan. The sponsors have been slow to monetize and turn over the capital portfolio in the 2020 and 2021 vintages. I think we all feel we would have seen more activity by now. I know there's a lot of questions around the fact in a higher rate environment, is that more constraining. I think the bigger constraint is that a lot of this stuff is still marked higher than where it can be monetized in the market and the sponsors are taking the optionality to wait longer because that's the way the incentive system works. They obviously have tools such as continuation funds. And other vehicles to extend life of funds. And so they're taking advantage of those. This will come out though this activity will come. And I think the thing I'd look at, I look at the MA levels and just recognizing the capital markets levels and just recognize it's the very light on sponsor activity. That sponsor activity is going to come. And when it comes, that will be a tailwind, but it has been slower than we would have expected at this point. But I'm not overly concerned with how the interest rate environment affects it in the short term.

Manan Gosalia

Got it. And are the midterms factoring into your conversations with clients at all? Like are clients waiting on the sidelines to get more clarity on that? Or maybe on the flip side, if there's a greater sense of urgency to get deals done?

David Solomon

I don't sense that people are sitting on the sidelines because of the midterm. I think from a strategic M&A perspective, the window is we have administration for 2.5 more years, and this is an administration where strategically to achieve scale, there's a general point of view that unlike in the prior administration or whatever the question was, the answer was no, in this administration, whatever the question is, the answer is very significant maybe. And so strategically, companies are very front-footed. And I think they feel comfortable that they've got a window regardless of the midterm, they've kind of got a window that presses through the administration. I think people are watching the midterms carefully to see what happens and what that means kind of for activity in government over the course of the next couple of years, but I don't see it at the moment, affecting activity significantly.

Operator

We will take our next question from Brennan Hawken with BMO.

Brennan Hawken

I had one on financing. You've spoken to both pricing and strength in Asia. You said that there's no one-timers there. But the third quarter was perceived as a bit of a de-grossing period. So curious whether or not you saw that? And is it possible to break down some of the growth that you've seen in those trading revenues between how much is tied to average balances growing versus the pricing benefits that you've highlighted?

Denis Coleman

So Brennan, I appreciate the question. I mean the growth rate for financing, in particular, on a sequential basis was about 3%. So I think there was deleveraging in the quarter. I think there was some disruption over the course of the quarter. And so the trajectory did not sustain substantial growth is still very healthy. And as we pointed out in the prepared remarks, it does remain an environment that's sort of supply of financing constrained. And so one of the levers that we have in terms of driving sustainable growth in that activity is as there can be pullbacks, we can assess expanding the funnel of activity that we take on board with existing clients and/or new clients as a bit of a valve as aggregate market levels adjust. But I think most of what would explain the sequential performance does relate to the overall backdrop of the market. There was not a significant change in the composition of the book away from that.

Brennan Hawken

Great. Okay. And then you spoke to the year-to-date comp ratio of 30%. Is that the best way we should be thinking about your expectations for the full year? And have we seen a few investors noted this morning about the strong performance on the comp ratio. Is there something to do with like revenue mix? Equities revenue has been really, really strong. That's generally considered a lower comp ratio business. Has that -- has it been like business mix that has helped the comp ratio? Or are you just seeing lower composition for talent?

Denis Coleman

Sure. So I'd say there's a couple of things in terms of how we think about the comp ratio. First, it is our best estimate at the moment for what we expect for the year. But I'd say that we are applying a strategic lens to it and your question does get after this. As we look at ways that we can invest to grow the firm, grow the earnings of the firm, scale the firm, we are building durable platform connected types of businesses. And over time, we should not have the same degree of headcount-related expenses that we might have historically to grow and scale the firm and certain of the more durable activities, including the financing activities, we're using a lot of the firm's financial resources and risk appetite to drive that activity. And so there can be favorable compensation ratio benefits with respect to the growth of those activities. .

I would not say that we're seeing any diminution in terms of the market for talent, frankly, quite the opposite, I think for the very, very best people in this environment, business professionals engineering professionals across the firm, there's a very, very strong bid for the very, very best people, and we make sure that we're in a position to compensate them appropriately but we are focused over the longer term on sustainably delivering operating leverage to our shareholders as we grow the firm, and this is one step in that direction.

Operator

We will take our next question from Dan Fannon with Jefferies.

Daniel Fannon

So one more on expenses, Denis, and shifting to noncomp. Obviously, excluding the charitable numbers in this quarter and I think next quarter as you highlighted. Can you just talk about the growth rate or outlook for non-comp expense as you think about the AI benefits you might be seeing in other areas of investment that could be growing or shrinking as we look ahead?

Denis Coleman

Sure. So first and foremost, you can see it in the numbers, both aggregate and the delta is, by far, the biggest component is transaction-based expenses that story remains the same for so long as we continue to see strong levels of client activity, particularly in equities and particularly in Asia, we'd expect that we'll continue to see growth in the transaction-based expenses. You're right, by the end of this year based on our current expectations, we'll have made contributions to support go-forward charitable giving that hopefully should carry us through about 5 years or so on our best estimate. So you won't see that -- you're unlikely to see that in the future periods as a result. .

The other area of strategic growth is across technology, generally speaking, comms and tech. We're going to continue to make sure that we have. Our people have access to the cutting-edge technology. We're making investments in our data infrastructure, our migrations to cloud. We're obviously making investments with respect to the models. And we're also making talent investments, all to make sure that we can support the firm's scaled growth over time. So I would call those out as the areas of focus.

Daniel Fannon

Understood. And then just as a follow-up, Wealth Management organic growth more than accelerated $47 billion in the quarter in terms of net inflows. Anything onetime in there or chunky that you would call out or maybe just talk to the kind of components, whether it was new adviser-asked recruiting same-store sales with existing clients? What was the driver there?

Denis Coleman

So I would not call out a particular onetime. I would say that we have now a multiyear sustained investment in expanding our adviser footprint. That's a decision that was made a number of years ago. We continue to ramp up advisers continue to expand our geographic footprint and our reach around the world. And we continue to have very, very strong investment performance, which is really important, and we continue to invest in the overall quality of our people and in terms of the client experience that our clients have with our people. It's a big area of strategic focus for the firm. It is performing substantially ahead of the targets that we put out earlier this year of 5%, but we're very pleased, and it's a huge opportunity for the firm.

Operator

We will take our next question from Devin Ryan with Citizens Bank.

Devin Ryan

A couple here on asset management. And really, on the alts business, just been incredibly impressive fundraising you started the year at a $75 billion to $100 billion target aggregate then targeting $150 billion. So clearly, a lot of incremental capital coming in here. Just curious if you could give us a little more color around how much of that is just being kind of opportunistic in the market with some of these themes like the volatility in private credit or whether there's something maybe bigger structurally has been changing around your ability to distribute or even add capacity to that business.

David Solomon

Yes. I mean just -- I appreciate the question, Devin. But there's nothing opportunistic about it. This is a concerted strategy that started 6-plus years ago. to really scale the platform. And when you look across the platform, it's a scaled platform, we've got managers across a variety of the different categories of private capital raising that have a lot of experience, good performance. And we've been very, very good to institutional allocators at customizing solutions that work for them with a long-term view. And in addition, we have very, very good demand for these products and services from our ultra high net worth channel, which is a very, very important component. And so this has been a strategic decision that we've made real scale progress on over a period of time that has meaningfully increased our capacity to compete at the highest level in the space. And I think we've got good runway.

When you look at private credit, for example, one of the things we benefited from as we've been in this business for 40 years and institutional allocators despite the noise in the media around private credit as spreads have normalized to more attractive levels, institutional allocators have thought this is a more attractive time in the last 3 to 6 months to bring capital into experienced private credit managers and we've benefited from that. So there's nothing opportunistic. This is a long-term strategy to have one of the largest and broadest private alts platforms, and you're seeing the benefit of our scale position start to come through.

Devin Ryan

I appreciate that, David. And then just a follow-up just on the acquisition front in Asset Management. It's clearly been an area of [indiscernible]. Are there any other areas you feel like you're subscale and asset management or where a few additional capabilities or investments could kind of like you just said on the alt side, similarly, really kind of improved the capacity or make you more relevant with institutional or retail clients?

David Solomon

Yes, there's no questions. We still have gaps across the platform. We have a presence across all the variety of private assets broadly, but there are some places where we're not as scaled as we'd like to be. That doesn't mean that we'll take -- we'll make an acquisition in that space because there's got to be fit. There's got to be the right team, but we continue to look for places where we're not scaled with our opportunities, both across private and the public side of our asset management business. to increase our scale. And I think there'll be other opportunities. I'm not going to call out something specifically, but we're not at scale everywhere. And if we see an opportunity that fits and accelerates our scale position, we're certainly going to consider it. but always with a very high bar around culture fit and the specific people we're bringing into the firm.

Operator

We'll take our next question from Gerard Cassidy with RBC.

Gerard Cassidy

Denis, you touched on in your comments about the provision being higher than you gave us guidance earlier in the quarter about it being higher. So there's no real surprise. And the outlook for credit from your comments still is strong. But can you elaborate a little bit on the marks that you took to that drove that provision?

Denis Coleman

Sure. So there's 2 drivers this quarter that are worth taking note of. One, which is the secondary driver, but yet it's important, which is overall growth in the portfolio. So we continue to deploy capital to expand the opportunities to lend to more clients. And frankly, that's an outgrowth of a strategic decision earlier in the year when we found ourselves with more excess capital that we wanted to fuel growth in our overall investment banking coverage suite of relationships. So a component of the provision number is aggregate growth in the portfolio. But it is the case as well that the impairment numbers were elevated. We looked very carefully, as we always do with the entire complexion of the portfolio our conclusion is they're highly idiosyncratic, a noncorrelated set of names, but we had a couple of different names that we ended up taking incremental impairments against in the quarter. We don't think it's necessarily the signal of something else to come, but it was appropriate for those individual names. And so we took the impairments and put it through in the third quarter.

Gerard Cassidy

Very good. And then as a follow-up, you talked about it earlier in the year about the leaning into Asia and the success that you've had, and you touched on it again today. Asian markets and the equity finance equity execution, you guys obviously benefit from. Are there any other opportunities globally where you can lean into new markets and get the benefits that you're seeing similar to what you did with Asia?

Denis Coleman

So I think there are opportunities all over the world where we can continue to lean in. What we found particularly attractive about Asia is that we felt that we were quite under scale and the opportunity was available with clients on attractive economic and risk terms. And so it was the most place -- a most attractive place geographically to drive incremental penetration and scale, and that's why we made it a priority. But there are plenty of other places around the world that we can continue to choose to drive incremental growth as well.

Operator

We'll take our next question from Chris McGratty with KBW.

Christopher McGratty

Great. Dave, more of a high-level question. Your outperformance on your ROE targets. Maybe a comment or 2 on your views on how much is cyclical versus structural?

David Solomon

I appreciate the question, Chris. I think a lot of it is we're structurally running the firm as a broader, more durable franchise with higher fundamental returns. I'm not going to speculate on -- through the cycle as to how the returns balance out. But what I will say when I go back over the last 5 years, I remember sitting on this call for multiple years, including as recently as a couple of years ago, when we were very confident that we could get the firm running through our targets through the cycle and there was a lot of skepticism about that. The reason the returns are significantly elevated is because we've significantly grown the breadth in the base of the firm, we've significantly changed the operational structure and the durability of the firm, and that's led to higher structural returns. And so there's a big strategic result of an investment over a long period of time. I will say at the moment, and I've said it on the call 3 times, we're in a very good environment. We're in a top quartile environment. And so is that flatter the -- what will be the average returns through the cycle, Absolutely. But structurally, the base returns on the firm have been meaningfully uplifted over the last 5 years.

Christopher McGratty

Perfect. And then second follow-up would be the midterms, I think there's a divided view of whether it's a divided government is good for activity or perhaps a headwind. Where do you stand on if the futures markets are right about a divided government, how that could play into your capital markets business?

David Solomon

I don't really -- first of all, the election doesn't occur for another month and political month as an eternity, so we'll see how the election plays out. And I'm not a good pundit nor are the prediction markets or the futures market is a good pundit of exactly what the environment will bring after the election as we head into '27. So we'll watch that and be prepared for whatever comes our way.

Operator

Thank you. At this time, there are no additional questions. Ladies and gentlemen, this concludes the Goldman Sachs Third Quarter 2026 Earnings Conference Call. Thank you for your participation. You may now disconnect.