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Investments (Tables)
 12 Months Ended
Dec. 31, 2019
Fair Value of Investments by Accounting Type
The table below presents information about investments.
 
       
  
As of December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Equity securities, at fair value
 
 
$22,163
 
    
$21,430
 
Debt instruments, at fair value
 
 
16,570
 
    
12,117
 
Available-for-sale
securities, at fair value
  
 
19,094
 
    
12,032
 
Investments, at fair value
 
 
57,827
 
    
45,579
 
Held-to-maturity
securities
  
 
5,825
 
    
1,288
 
Equity method investments
 
 
285
 
    
357
 
Total investments
 
 
$63,937
 
    
$47,224
 
Disclosure Of Equity Securities At Fair Value
The table below presents information about equity securities, at fair value.
 
       
  
As of December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Equity securities, at fair value
 
 
$22,163
 
    
$21,430
 
 
Equity Type
 
 
 
    
 
Public equity
 
 
11%
 
    
7%
 
Private equity
 
 
89%
 
    
93%
 
Total
 
 
100%
 
    
100%
 
Asset Class
 
 
 
    
 
Corporate
 
 
79%
 
    
81%
 
Real estate
 
 
21%
 
    
19%
 
Total
 
 
100%
 
    
100%
 
Region
 
 
 
    
 
Americas
 
 
50%
 
    
53%
 
EMEA
 
 
17%
 
    
16%
 
Asia
 
 
33%
 
    
31%
 
Total
 
 
100%
 
    
100%
 
Disclosure Of Debt Securities At Fair Value
The table below presents information about debt instruments, at fair value.
 
       
  
As of December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Corporate debt securities
 
 
$11,821
 
    
$  8,434
 
Securities backed by real estate
 
 
2,619
 
    
1,775
 
Other
 
 
2,130
 
    
1,908
 
Total
 
 
$16,570
 
    
$12,117
 
Investments in Funds that are Calculated Using Net Asset Value Per Share
The table below presents the fair value of investments in funds at NAV and the related unfunded commitments.
 
                 
$ in millions
   
Fair Value of Investments
     
Unfunded Commitments
 
As of December 2019
  
 
 
    
 
Private equity funds
 
 
$2,767
 
  
 
$
  
 765
 
Credit funds
 
 
983
 
  
 
820
 
Hedge funds
 
 
125
 
    
–
 
Real estate funds
 
 
331
 
  
 
196
 
Total
 
 
$4,206
 
  
 
$1,781
 
 
As of December 2018
  
 
 
    
 
Private equity funds
   
$2,683
     
$   809
 
Credit funds
   
548
     
1,099
 
Hedge funds
   
161
     
–
 
Real estate funds
   
544
     
203
 
Total
   
$3,936
     
$2,111
 
Summary of Securities Accounted for Available-for-Sale
The table below presents information about
available-for-sale
securities by tenor.
 
                         
$ in millions
   
Amortized Cost
     
Fair Value
     
Weighted Average Yield
 
As of December 2019
  
 
 
    
     
 
Less than 5 years
 
 
$14,063
 
  
 
$14,041
 
  
 
1.53%
 
Greater than 5 years
 
 
4,974
 
  
 
5,053
 
  
 
2.10%
 
Total
 
 
$19,037
 
  
 
$19,094
 
  
 
1.68%
 
 
As of December 2018
  
 
 
    
     
 
Less than 5 years
   
$  5,954
     
$  5,879
     
2.10%
 
Greater than 5 years
   
6,231
      
6,153
      
2.44%
 
Total
   
$12,185
     
$12,032
     
2.28%
 
In the table above:
 
•
Available-for-sale
securities consists of U.S. government obligations that were classified in level 1 of the fair value hierarchy as of both December 2019 and December 2018.
 
•
 The firm sold $9.58 billion of
available-for-sale
securities during 2019. The realized gains on sales of such securities were $181 million for 2019, and were included in the consolidated statements of earnings. The sales and realized gains during 2018 were not material.
 
•
 The gross unrealized gains included in accumulated other comprehensive income/(loss) were $137 million and the gross unrealized losses included in accumulated other comprehensive income/(loss) were not material as of December 2019. The gross unrealized losses included in accumulated other comprehensive income/(loss) were $153 million as of December 2018 and were related to securities in a continuous unrealized loss position for greater than a year.
•
Available-for-sale
securities in an unrealized loss position are periodically reviewed for other-than-temporary impairment. The firm considers various factors, including market conditions, changes in issuer credit ratings, severity and duration of the unrealized losses, and the intent and ability to hold the security until recovery to determine if the securities are other-than-temporarily impaired. There were no such impairments during 2019, 2018 or 2017.
Debt Securities, Held-to-maturity
The table below presents information about
held-to-maturity
securities by type and tenor.
 
                         
$ in millions
   
Amortized Cost
     
Fair Value
     
Weighted Average Yield
 
As of December 2019
  
 
 
    
     
 
Less than 5 years
 
 
$3,534
 
  
 
$3,613
 
  
 
2.40%
 
Greater than 5 years
 
 
1,534
 
  
 
1,576
 
  
 
2.25%
 
Total U.S. government obligations
 
 
5,068
 
  
 
5,189
 
  
 
2.35%
 
Less than 5 years
 
 
6
 
  
 
6
 
  
 
4.16%
 
Greater than 5 years
 
 
751
 
  
 
769
 
  
 
1.67%
 
Total securities backed by real estate
 
 
757
 
  
 
775
 
  
 
1.69%
 
Total
held-to-maturity
securities
 
 
$5,825
 
  
 
$5,964
 
  
 
2.27%
 
 
As of December 2018
  
 
 
    
     
 
Less than 5 years
   
$   498
     
$   511
     
3.08%
 
Total U.S. government obligations
   
498
      
511
      
3.08%
 
Less than 5 years
   
5
      
6
      
4.61%
 
Greater than 5 years
   
785
      
800
      
1.78%
 
Total securities backed by real estate
   
790
      
806
      
1.80%
 
Total
held-to-maturity
securities
    
$1,288
     
$1,317
     
2.29%
 
Fair Value, Investments, Measurement Inputs, Disclosure
The table below presents a summary of level 3 financial assets.
 
       
  
As of December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Trading assets:
 
 
 
    
 
Trading cash instruments
 
 
$    1,242
 
    
$    1,689
 
Derivatives
 
 
4,654
 
    
4,948
  
Investments
 
 
15,282
 
    
13,548
  
Loans
 
 
1,890
 
    
1,990
  
Other financial assets
 
 
–
 
    
6
  
Total
 
 
$  23,068
 
    
$  22,181
 
Investments, Level 3 Rollforward
The table below presents a summary of the changes in fair value for level 3 loans.
 
 
 
 
 
  
Year Ended December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Beginning balance
 
 
$1,990
 
    
$1,973
 
Net realized gains/(losses)
 
 
46
 
    
74
 
Net unrealized gains/(losses)
 
 
85
 
    
72
 
Purchases
 
 
249
 
    
88
 
Sales
 
 
(14
)
   
(66
 )
Settlements
 
 
(795
)
   
(717
 )
Transfers into level 3
 
 
444
 
    
995
 
Transfers out of level 3
 
 
(115
)
   
(429
 )
Ending balance
 
 
$1,890
 
    
$1,990
 
The table below presents information, by loan type, for loans included in the summary table above.
 
       
  
Year Ended December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Corporate
 
 
 
    
 
Beginning balance
 
 
$ 659
 
    
$ 672
 
Net realized gains/(losses)
 
 
5
 
    
15
 
Net unrealized gains/(losses)
 
 
(27
)
   
(11
 )
Purchases
 
 
151
 
    
69
 
Sales
 
 
–
 
    
(58
 )
Settlements
 
 
(298
)
   
(225
 )
Transfers into level 3
 
 
290
 
    
310
 
Transfers out of level 3
 
 
(28
)
   
(113
 )
Ending balance
 
 
$ 752
 
    
$ 659
 
Commercial real estate
 
 
 
    
 
Beginning balance
 
 
$ 677
 
    
$ 853
 
Net realized gains/(losses)
 
 
20
 
    
38
 
Net unrealized gains/(losses)
 
 
28
 
    
33
 
Purchases
 
 
11
 
    
14
 
Sales
 
 
(9
)
   
(4
 )
Settlements
 
 
(229
)
   
(330
 )
Transfers into level 3
 
 
94
 
    
382
 
Transfers out of level 3
 
 
(1
)
   
(309
 )
Ending balance
 
 
$ 591
 
    
$ 677
 
Residential real estate
 
 
 
    
 
Beginning balance
 
 
$ 290
 
    
$ 213
 
Net realized gains/(losses)
 
 
15
 
    
18
 
Net unrealized gains/(losses)
 
 
26
 
    
(13
 )
Purchases
 
 
58
 
    
3
 
Sales
 
 
(5
)
   
(4
 )
Settlements
 
 
(137
)
   
(70
 )
Transfers into level 3
 
 
60
 
    
143
 
Transfers out of level 3
 
 
(86
)
   
–
 
Ending balance
 
 
$ 221
 
    
$ 290
 
Wealth management and other
 
 
 
    
 
Beginning balance
 
 
$ 364
 
    
$ 235
 
Net realized gains/(losses)
 
 
6
 
    
3
 
Net unrealized gains/(losses)
 
 
58
 
    
63
 
Purchases
 
 
29
 
    
2
 
Sales
 
 
–
 
    
–
 
Settlements
 
 
(131
)
   
(92
 )
Transfers into level 3
 
 
–
 
    
160
 
Transfers out of level 3
 
 
–
 
    
(7
 )
Ending balance
 
 
$ 326
 
    
$ 364
 
Investments [Member]  
Investments accounted for at fair value
The table below presents investments accounted for at fair value by level within the fair value hierarchy.
 
                                 
$ in millions
   
Level 1
     
Level 2
     
Level 3
     
Total
 
As of December 2019
  
 
 
    
   
 
Government and agency obligations:
   
     
     
 
U.S.
 
 
$19,094
 
  
 
$        
 
–
 
  
 
$        
 
–
 
  
 
$19,094
 
Non-U.S.
 
 
–
 
  
 
36
 
  
 
–
 
  
 
36
 
Corporate debt securities
 
 
48
 
  
 
7,325
 
  
 
3,465
 
  
 
10,838
 
Securities backed by real estate
 
 
–
 
  
 
2,024
 
  
 
595
 
  
 
2,619
 
Other debt obligations
 
 
732
 
  
 
1,043
 
  
 
319
 
  
 
2,094
 
Equity securities
 
 
251
 
  
 
7,786
 
  
 
10,903
 
  
 
18,940
 
Subtotal
 
 
$20,125
 
  
 
$18,214
 
  
 
$15,282
 
  
 
$53,621
 
Investments in funds at NAV
 
 
 
  
 
 
  
 
 
  
 
4,206
 
Total investments
 
 
 
  
 
 
  
 
 
  
 
$57,827
 
 
As of December 2018
  
 
 
    
     
     
 
Government and agency obligations:
   
     
     
 
U.S.
   
$12,044
     
$        
 
–
      
$        
 
–
      
$12,044
 
Non-U.S.
   
–
     
44
      
–
     
44
  
Corporate debt securities
   
23
      
5,323
      
2,540
      
7,886
  
Securities backed by real estate
 
 
–
 
    
1,318
      
457
      
1,775
  
Other debt obligations
   
719
      
917
      
216
      
1,852
  
Equity securities
   
458
      
7,249
      
10,335
      
18,042
  
Subtotal
 
 
$13,244
 
 
 
$14,851
 
 
 
$13,548
 
 
 
$41,643
 
Investments in funds at NAV
   
     
     
     
3,936
  
Total investments
   
     
     
     
$45,579
 
Fair Value, Investments, Measurement Inputs, Disclosure
The table below presents the amount of level 3 investments, and ranges and weighted averages of significant unobservable inputs used to value such investments.
 
 
 
 
 
 
Level 3 Assets and Range of Significant Unobservable
Inputs (Weighted Average) as of December
 
 
 
 
 
 
 
 
 
 
$ in millions
 
 
2019
 
 
 
2018
 
Corporate debt securities
 
Level 3 assets
 
 
$3,465
 
 
 
$2,540
 
Yield
 
 
5.5% to 29.8% (12.0%
)
 
 
6.5% to 32.3% (12.7%
)
Recovery rate
 
 
25.0% to 100.0% (68.5%
)
 
 
50.5% to 78.0% (74.6%
)
Duration (years)
 
 
2.9 to 5.9 (5.0
)
 
 
2.0 to 4.7 (3.8
)
Multiples
 
 
0.6x to 24.4x (7.0x
)
 
 
1.3x to 20.3x (7.7x
)
Securities backed by real estate
 
Level 3 assets
 
 
$595
 
 
 
$457
 
Yield
 
 
9.4% to 20.3% (16.0%
)
 
 
9.5% to 20.3% (15.5%
)
Recovery rate
 
 
33.1% to 34.4% (33.5%
)
 
 
32.9% to 39.7% (37.9%
)
Duration (years)
 
 
0.4 to 3.0 (0.9
)
 
 
1.1 to 4.8 (2.2
)
Other debt obligations
 
Level 3 assets
 
 
$319
 
 
 
$216
 
Yield
 
 
3.4% to 5.2% (4.5%
)
 
 
4.1% to 6.1% (5.2%
)
Duration (years)
 
 
4.0 to 8.0 (6.7
)
 
 
4.0 to 9.0 (7.5
)
Equity securities
 
Level 3 assets
 
 
$10,903
 
 
 
$10,335
 
Multiples
 
 
0.8x to 36.0x (8.0x
)
 
 
1.0x to 23.6x (8.1x
)
Discount rate/yield
 
 
2.1% to 20.3% (13.4%
)
 
 
7.2% to 22.1% (14.4%
)
Capitalization rate
 
 
3.6% to 15.1% (6.1%
)
 
 
3.5% to 12.3% (6.1%
)
In the table above:
 
•
 Ranges represent the significant unobservable inputs that were used in the valuation of each type of investment.
 
•
 Weighted averages are calculated by weighting each input by the relative fair value of the investment.
 
•
 The ranges and weighted averages of these inputs are not representative of the appropriate inputs to use when calculating the fair value of any one investment. For example, the highest multiple for private equity securities is appropriate for valuing a specific private equity security but may not be appropriate for valuing any other private equity security. Accordingly, the ranges of inputs do not represent uncertainty in, or possible ranges of, fair value measurements of level 3 investments.
 
•
 Increases in yield, discount rate, capitalization rate or duration used in the valuation of level 3 investments would have resulted in a lower fair value measurement, while increases in recovery rate or multiples would have resulted in a higher fair value measurement as of both December 2019 and December 2018. Due to the distinctive nature of each level 3 investment, the interrelationship of inputs is not necessarily uniform within each product type.
 
•
 Corporate debt securities, securities backed by real estate and other debt obligations are valued using discounted cash flows, and equity securities are valued using market comparables and discounted cash flows.
•
 The fair value of any one instrument may be determined using multiple valuation techniques. For example, market comparables and discounted cash flows may be used together to determine fair value. Therefore, the level 3 balance encompasses both of these techniques.
 
•
 Recovery rate was not significant to the valuation of level 3 securities backed by real estate as of December 2018.
Investments, Level 3 Rollforward
The table below presents a summary of the changes in fair value for level 3 investments.
 
       
  
Year Ended December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Beginning balance
 
 
$13,548
 
    
$12,208
 
Net realized gains/(losses)
 
 
252
 
    
237
 
Net unrealized gains/(losses)
 
 
1,295
 
    
834
 
Purchases
 
 
1,322
 
    
1,366
 
Sales
 
 
(986
)
   
(1,512
 )
Settlements
 
 
(1,192
)
   
(1,451
 )
Transfers into level 3
 
 
2,646
 
    
3,456
 
Transfers out of level 3
 
 
(1,603
)
   
(1,590
 )
Ending balance
 
 
$15,282
 
    
$13,548
 
In the table above:
 
•
 Changes in fair value are presented for all investments that are classified in level 3 as of the end of the period.
 
•
 Net unrealized gains/(losses) relates to instruments that were still held at
period-end.
 
•
 Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period in which they occur. If an investment was transferred to level 3 during a reporting period, its entire gain or loss for the period is classified in level 3.
 
•
 For level 3 investments, increases are shown as positive amounts, while decreases are shown as negative amounts.
The table below presents information, by product type, for investments included in the summary table above.
 
       
  
Year Ended December
 
                 
$ in millions
 
 
2019
 
    
2018
 
Corporate debt securities
   
 
Beginning balance
 
 
$
 
 2,540
 
    
$  1,722
 
Net realized gains/(losses)
 
 
64
 
    
62
  
Net unrealized gains/(losses)
 
 
198
 
    
66
  
Purchases
 
 
297
 
    
369
  
Sales
 
 
(43
)
   
(231
 )
Settlements
 
 
(274
)
   
(358
 )
Transfers into level 3
 
 
1,106
 
    
1,077
  
Transfers out of level 3
 
 
(423
)
   
(167
 )
Ending balance
 
 
$
 
 3,465
 
    
$  2,540
 
Securities backed by real estate
   
 
Beginning balance
 
 
$     457
 
    
$     662
 
Net realized gains/(losses)
 
 
27
 
    
20
  
Net unrealized gains/(losses)
   
–
     
(9
 )
Purchases
 
 
238
 
    
109
  
Sales
 
 
(82
)
   
(97
 )
Settlements
 
 
(98
)
   
(56
 )
Transfers into level 3
 
 
63
 
    
76
  
Transfers out of level 3
 
 
(10
)
   
(248
 )
Ending balance
 
 
$     595
 
    
$     457
 
Equity securities
   
 
Beginning balance
 
 
$10,335
 
    
$  9,626
 
Net realized gains/(losses)
 
 
160
 
    
155
  
Net unrealized gains/(losses)
 
 
1,096
 
    
775
  
Purchases
 
 
669
 
    
819
  
Sales
 
 
(852
)
   
(1,161
 )
Settlements
 
 
(812
)
   
(1,007
 )
Transfers into level 3
 
 
1,477
 
    
2,303
  
Transfers out of level 3
 
 
(1,170
)
   
(1,175
 )
Ending balance
 
 
$10,903
 
    
$10,335
 
Other debt obligations
   
 
Beginning balance
 
 
$     216
 
    
$     198
 
Net realized gains/(losses)
 
 
1
 
    
–
 
Net unrealized gains/(losses)
 
 
1
 
    
2
  
Purchases
 
 
118
 
    
69
  
Sales
 
 
(9
)
   
(23
 )
Settlements
 
 
(8
)
   
(30
 )
Ending balance
 
 
$     319
 
    
$     216