Good morning. Thanks, everybody, for joining. And most importantly, David, thank you for joining.
My pleasure.
So.
February. Happy to be back.
That's right. It's February. We've got to be in Key Biscayne. So it really is true. You need no introduction. But CEO and Chairman of Goldman Sachs, pleasure to have you back yet again. So I'd love to start. Five years ago, you had the first-ever Goldman Sachs Investor Day. Laid out a lot of plans, and you made a lot of changes since then. So when you look back and reflect, what do you think are the most significant changes that were implemented across Goldman since then?
Sure. First of all, thank you again for having me, Brennan. I'm happy to be here. We made a handful of changes in the operating mode of the firm five, six years ago that I think have brought real benefits for shareholders and have allowed us to execute very, very well for our clients. The things that I would highlight that I think are most important, first, the client centricity of the firm and, for lack of a better term, what I would call One Goldman Sachs.
We really thoughtfully and purposely thought about the way we serve our clients, thought about the way clients experience the firm, and have really built an operating ethos around One Goldman Sachs that has really delivered significant market share gains and a real feeling from our clients that their interests are being met and are really at the center of what the firm does. And ours is a big client franchise. And so certainly, that's been very effective. I think secondarily, we really came to appreciate that we needed to invest to grow. And we made a series of investments, both with respect to financial resources to bring financial resources to bear and more significance, and also people resources to expand our reach and our penetration and our ability to serve our clients. And that's allowed us to significantly grow the firm.
So if you step back and you look at the journey of the firm over the last five or six years, the firm ran for a long time with revenues in the mid-30s. In 2019, we got it to $37 billion. But today, the firm's revenues in 2024 were $54 billion. We've grown the earnings power of the firm materially, and we've significantly uplifted the returns of the firm. And I think that's the result of the client centricity of the firm and investment in resources and people to allow us to really serve the firm well. We've also made the decision to narrow some of the focus of the firm, and we really have the firm organized now and focused on two primary businesses: Global Banking and Markets, where I think it's hard to debate in any way, shape, or form our leadership position.
And secondarily, our Asset and Wealth Management platform. We're the fifth largest active asset manager. We supervise close to $3.2 trillion of assets. And we're growing the durable revenues in that business by high single digits. And that business also has embedded in it our ultra-high net worth wealth management business, which continues to grow. And I think there's significant opportunity for us across that broad platform. So the firm's positioned well. I think we have a clear journey based on the actions we've taken to higher returns. I think the market is accepting that and understands that path a little bit more clearly. I think our client franchise is as strong as it's been during my 25 years at the firm. And so I'm optimistic. Now, I can't predict the environment.
I can give you reasons why this certainly feels like we've got some tailwinds we didn't have over the last few years. But there's also uncertainty in the environment. And that will obviously affect the short-term execution, but not the long-term trajectory of the firm.
Sure. Certainly, a lot of that, and, um, the equity market has noticed too. Goldman's been a pretty great stock here.
We've made progress.
Yes. So that's wonderful. Looking ahead to the next few years at a high level, what are your top priorities? I'd be interested to hear that. And you've also made some organizational changes recently. So how do those come into play?
Well, we continue. Another thing, when you go back and you ask what's really important, I think we've changed the mindset of the organization, one, to have a growth orientation, and two, to take a medium and longer-term view instead of a year-to-year view in really driving and planning our business. If you go back six, seven years ago, the firm did not have a thorough multi-year business planning process. And if you want to grow any organization and make investments to grow, you have to have a process to think about those investments, metric those investments, hold the organization accountable for those investments. And so we've made significant progress. I feel very good about what we've accomplished in the last five years. But this organization is focused on what it can accomplish the next five years.
And so we are very, very set up to drive those changes that can continue to uplift returns and continue to grow the organization and continue to capture share. To do that, we thought it was very, very important at this point to kind of bring up the next layer of leadership, the group of people that is really going to help us drive the firm forward over the course of the next five years. And so we lifted what I'd say is the key leaders across the business into more senior positions so that we have more help in driving that strategy forward. And then secondly, the other change that you're referring to is we did a little bit of a refocus of our financing resources across our banking and markets and investment banking platform by creating Capital Solutions.
And the firm has always sat in the middle of capital formation. But with what's going on in terms of private capital formation, our ability uniquely as a firm to source opportunities for our clients, whether that's through our 10,000-12,000 corporate relationships or that's through our institutional partnerships, we're very, very uniquely positioned as an origination engine. And we're also uniquely positioned in that we have our balance sheet. We have a great network for syndication and distribution. And we have a huge asset management platform. And so our ability to really have lots of different directions to marry capital with ideas and opportunities, I think, is unique. And we've tried to set up through this Capital Solutions platform a better mousetrap to ensure we really take advantage of the things that the organization has that are truly unique.
Right. You guys certainly are well positioned to benefit from some of those secular trends in private markets. I mean, that's been a theme that just keeps coming up. So I'd love to shift gears. Excuse me. I'd love to shift gears a bit. We had a big election a few months ago, new administration. It's really almost added octane to the excitement around a capital markets recovery. So we'd love to hear about your thoughts on the new administration and what you think the implications could be.
Yeah. Well, I mean, I'd start. It's an election. We have one every four years. It wasn't any bigger or any smaller than any other election. And we have a new administration. And I think that the administration is going to run a more growth-oriented agenda. And I think one of the reasons why the market has responded the way that it has is because the market believes that a more growth-oriented agenda will spur investment. Maybe there's a little bit of unleash of animal spirits, a little bit of a swing back of some of the regulatory increase in the last few years. And so market participants are excited about that. Now, the ultimate direction of policy is a little bit more complicated than that view. And certainly, the regulatory environment should be a constructive tailwind. But the broad policy landscape is still uncertain.
And whether that's immigration policy, tax policy, fiscal policy, trade policy, energy policy, there's a lot of policy that is shifting. And until we have more certainty on that policy, that's going to create a little bit of volatility. But the direction of travel should be more constructive, particularly with respect to kind of U.S. preeminence from an investment perspective, should be a little bit of a tailwind. And the market's responding to that. At the end of the day, if the policy implications of the things that I just outlined aren't put in place in a way that's supportive of that, you'll get rebalancing. And look, I was really encouraged that yesterday was a pretty normal Monday. The previous two Mondays were a little bit more exciting and interesting, particularly if you're a market participant. But we're going to have some stops and starts.
But I do think the direction of travel will be more constructive, certainly, for our business. And we're excited. And we're seeing that. We're definitely seeing that in activity. I don't want people to get too overly excited because while I can see the activity and the dialogues, particularly around M&A, and I'd say some large-cap M&A, it takes time for these things to come to fruition. They then have to get announced. Then it takes time for them to close. The revenue doesn't come in until they close. But the level of activity, the level of dialogue, and I also think a belief that people will be in a position to transact on certain things that they felt like they could not transact on over the course of the past four years is definitely a shift.
And I do think ultimately, there's a lot of pent-up energy in capital markets, particularly around the financial sponsor community. And that will be unleashed. There's a reason, and I keep referring, and you know this because you and I have had this discussion, to 10-year averages in capital markets and M&A activity. There's a reason they're 10-year averages. They tend to follow, over some period of time, market cap growth and GDP growth. They really don't go backwards. And so we've been operating below for a variety of reasons. I am very confident we will get back to 10-year averages. And we'll have periods of time where we exceed 10-year averages. And this year could be one of those times.
Right, and just because you touched on it, one of the questions that's come up a bit from investors during the conference is the fact that there's a lot of excitement around all of that reopening. January started a little slow. Do you think that it has to do with some of the policy uncertainty that you hit on? What do you think might be causing that? And what's your expectation around and reaction to the slow January?
You know what I would say. I think what people are referring to when they say January is a little slow is they're referring particularly to M&A. And I just remind people there was a lot of uncertainty leading up to an election that was at the beginning of November. M&A is not an instantaneous thing. So the election occurred and dialogue started in. I can tell you because I'm behind the curtain, there's a lot more dialogue. There's a lot more activity. It's not surprising that a month and a half after the election, you don't see a flood of responsive things to that. I do think it will pick up during the year. I do think you will see more.
Has there been a little bit more as some of, for lack of a better term, kind of the shine of enthusiasm that came on November 4th, 5th, whatever it was, has that waned a little bit as people are starting to understand that there are policy uncertainties? Sure. But the direction of travel is more constructive. And I think you're going to see meaningfully more activity. And there's pent-up demand for that activity.
Yeah. That's all fair. You touched on the regulatory shift, I think, which is.
By the way, last year wasn't such a bad year.
No?
Yeah. So let's keep that in perspective.
For sure. For sure. Especially versus the year prior.
Absolutely.
Which was effectively a capital markets recession.
Yeah.
So you touched on the regulatory shifts, which I think are really important. I'd love to hear your thoughts on which parts of your business you think could see the greatest impact from some of these anticipated.
The primary, I think there are two, I think there are two primary focuses around for financial services and large banks in particular around, let's say, a little bit of a regulatory reset. I would just say as a general matter, 15 years ago, as we came out of the financial crisis, Dodd-Frank went into place. It does make sense to step back. Okay, we're in a very, very different place and say, okay, what do we do that makes sense? What do we do that needs to be adjusted in some way? I think the most significant thing that's going to get a lot of attention is the capital regime. As you know, there are three aspects to the capital regime that are getting attention. The first is Basel III, which ultimately does need to be resolved.
And my own view is we'll be in a much more constructive place with that than the perception of where we were a year ago. The second is CCAR. And I think you're aware that the industry has had discussions with the Fed for a number of years. Over five years, the industry has felt that this process was not correct, was not being executed correctly, was not legal. And ultimately, and the industry took this very seriously, the industry has filed a lawsuit to try to move this. That lawsuit was really filed to stay the industry's rights because there was a statute of limitations issue around the industry's rights around this. And there'll be a process, I think, to get that to a better place. And what are the things that are important in that?
One, more transparency around models, a better understanding of what the models are indicating and why. And then secondarily, more consistency to allow an ability for institutions to plan. So what I really want, I want capital to be right. Okay, I'm not sitting here saying it's got to be less. It's got to be more. I want it to be right. Because I know when it's right and we can plan and we know it will be consistent for a number of years, we can run our business and optimize around that. But what you can't have is up, down, up, down, unclear. And I think we'll get to a better place on that. And I also think when you look at the construction of CCAR directionally and the SCB, we have more to benefit from that if that gets reorganized in some way. So that's the second thing.
And then third, GSIB. In the original statute, GSIB was supposed to calibrate against GDP growth and market growth going back, I think, to 2013, 2014. It hasn't been calibrating. And so that's in the statute around GSIB. And so that's a third. So that whole capital regime, that's first. And I would hope in the next 12 to 24 months, we can have more clarity on that. And by the way, that's good for investors. Because you look across the industry that you cover, everybody's running big buffers. That capital should be reinvested in the system that drives investment, that drives growth, that drives lending growth. That's a much more constructive way to operate. And so I think we'll get to a better place there. But we'll see. But there's a lot of focus on that by the industry.
And I also think regulators to get this resolved and get it to a better place. Second, I think the industry is just very, very focused on the amount of activity from regulators. And we want more transparency around that activity. And I think it's been a headwind for firms. It's required us to make significant investments in infrastructure. And we hope that that pendulum will swing a little bit. I think we need a regulatory construct. But the regulatory construct is supposed to ensure that the system is safe and sound. It's not supposed to be intruding on a much broader basis. And so we look forward to working with the regulators and with the House Financial Services Committee, the Senate Banking Committee to try to work with the regulators to get this to a better, more transparent place. Transparency is important in this stuff because transparency creates accountability.
I think accountability is important on both sides.
Yeah. Yeah, I think that's really well said. And the CCAR process, the opacity, I mean, it's a little maddening.
I mean, you know, and so I think we're going to get to a better place. I think there's a really good shot of getting to a better place.
I think that's fair. You spent some time talking about the investment banking outlook. So what I'd love to hear is maybe your perspective on the trading outlook. Trading has been better, certainly, than the banking side. And strong performance in 2024 for sure from Goldman and some of the competitors too. But you guys really had a strong 2024. What do you think the opportunity set for the trading business is for 2025 and beyond?
So, I think we have a leading franchise, one of the one or two leading franchises across the markets business. And one of the things that's just interesting, Brennan, I understand how we got here over the last 20 years. But if everyone would step back and stop looking at it on a quarter-to-quarter basis and start looking on a year-to-year basis, it is a huge globally scaled platform with a big, big diverse array of businesses. And it's a huge opportunity. It's not a cyclical opportunity per se. It grows with market cap growth and activity in markets and GDP growth. And we sit in the middle of that. And yes, there's one quarter a little higher, one quarter a little lower. But if you start looking year to year to year, it's a pretty diverse, stable business where you get it in different buckets.
Now, that doesn't mean it can't be lower this year or higher than that. But the direction of travel is the world grows, market cap grows, our clients grow their assets. They all need to transact, to hedge, to finance with us. We sit in the middle of that. And it's a big, big opportunity set. And so there is nothing that's going on in that business that doesn't tell me that for the next five to 10 years, it's not going to be a bigger opportunity set than it was five to 10 years ago, unless you think the world is going to melt down and be horrible for a long, long time. And I don't believe that. I'm glass half full. Sure, will there be speed bumps? Absolutely. Could there be big speed bumps? Absolutely. But this is a business that we have a leading position in.
It's broad. It's diversified. We have extraordinary talent. And that's a very, very key fact. Extraordinary talent. We can marry financial resources with extraordinary talent and serve our clients very, very well. It's a big opportunity. It's not getting smaller. It's only going to get bigger over time. And our job is to optimize it, drive returns for shareholders. And we think we're very good at that. And sure, will there be some quarters that are not as attractive as others? Yes. Will there be some years where the business is slower? Of course. That's the nature of the business. But the direction of travel over periods of time, big, broad, diversified business that I actually think is much more durable than the market gives us credit for, generates a lot of earnings.
You guys started to break out the financing revenues, which was really, really helpful quickly speaking to that stability.
I mean, you look at that. I mean, you think about financing revenues over the last five years. We've taken the financing revenues in that business since 2018, 2019 from $3.5 billion to $9 billion. John, did I get that right? Is that, yeah? I got that right? Okay. So the growth is really significant. By the way, during that same period of time, the intermediation revenues also grew very, very significantly. So as you finance your clients more, and this is something we've believed, you drive more intermediation activity with them because they're reliant on your financing and they therefore are going to transact with you more. And so it's a great business. I think it's a place where the firm really shines, thanks to the extraordinary team that we have.
I think the opportunity set's going to get bigger, not smaller, over the next 5-10 years.
Yeah, the financing relationships and the trading, their strategic relationships.
Absolutely. Absolutely.
We'd love to hear your thoughts on capital deployment. So you commented on the regulatory environment, the capital, and the change in the capital regime is something that one of the big things you expect. So how should we be thinking about the deployment of that capital?
Yeah, so generally, our mode with capital is first to deploy it in the business if we see opportunities that are attractive for returns, and if we don't, to return it to shareholders through dividends. And we've been committed, and I think you've seen this, to steadily grow our dividend, and we are committed to continue to steadily grow our dividend, and last, to return it through buybacks. And look, we're acutely aware of kind of the range of opportunities with all of that. But that is our capital operating ethos, and we'll continue to operate that way.
If we see opportunities to deploy in the business, we would much rather deploy in the business with attractive returns. But then we generate a lot of capital. We're going to keep growing our dividend.
We will buy back stock and return it if we don't see opportunities to deploy it.
Right. And certainly, based upon your expectation of the opportunity set, the opportunity to deploy in the business is probably going to be pretty solid.
There'll be opportunities to deploy. There'll be opportunities to deploy for sure.
Yeah. You touched on.
And by the way, just tying back, I mean, I think one of the most significant things that we did that's very different than the way the firm operated the previous decade is we put more financial resources. We deployed more capital into the business and significantly grew the financial resources of the business, which allowed us to grow the business. On one basis, especially when you think about the markets business, it is a return on assets business. And so if you deploy more financial resources into the business, you can grow your activity with clients. You have to do that with discipline. You have to do that with risk management focus always. But that's been a significant strategic shift for the firm.
Sure. You touched on the Asset and Wealth Management business before. And I'd love to circle back to that. You've grown the business really well. You've almost shifted the approach where the HPI is now historical. So you're working your way out of there. So there's been a shift to the strategy. What are you thinking about when you think about the next few years where you are most excited about growth and how you're thinking about that business strategically?
Sure. So when you think about Asset and Wealth Management, I'm excited about it because it took us a number of years to really get the platform organized, to get the right leadership in the platform. It's all in the rearview mirror. We have this $3.2 trillion Asset and Wealth Management platform. We're growing our management fees, high single digit. The wealth business continues to grow, and I think when you look at it, there are really a handful of areas where we think we can continue to grow. Alternatives is a big, big focus, and we continue to scale our alternatives business. I think you know we've raised over the last five years $325 billion in alternatives. We raised over $70 billion this past year. We've said publicly we expect to raise a comparable amount in our alternatives business this year.
So we have one of the biggest kind of alternative platforms broadly. But it's still scaling. And as we scale it, it's going to drive improved profitability, which will improve the overall margin and the overall return of that Asset and Wealth Management platform. In addition, we continue to believe we can grow our wealth business. The wealth business scales with people resources. And it takes time. So if you look at markets, we can scale markets by adding capital. And you get a result very, very quickly. In wealth, you have to scale with people. And it takes time. But that's still a very fragmented business. We have a very, very strong leadership position in the United States in the ultra-high net worth business. Lots of opportunity internationally. And so we continue to invest in growing in the United States, where there's enormous wealth opportunity, and also growing internationally.
And then third, on customized solutions. Because when you think about our platform across Asset and Wealth Management, we have an ability. And I was just on a situation this morning in Europe where I joined a pitch early this morning. We have an ability to really bring customized solutions to very, very complicated situations. And that's one of the reasons why, for example, we're the number one OCIO provider to basically outsource capabilities to pensions that basically want to outsource them. That is complex stuff that requires real delivery of integrated resources across an organization and solutions that are customized to what those assets need. And so those are the three key areas that we're focused on. We continue to think we can grow the business, continue to improve the margin, and continue to uplift the returns. And that's really important to the overall return profile of the firm.
For the next three to five years, we have a zealous focus on the execution of that. That's a big opportunity for us.
Yeah. Yeah. I mean, when you guys laid out those fundraising targets at the first investor day, I was a little skeptical. You've crushed them.
The first target was $150 billion. For the end of 2024, we did $325. So we definitely achieved it. You always want to beat targets when you put them out there. And there's new muscle. But the platform, the platform of Goldman Sachs is very, very powerful. And the network and the global breadth of it is quite strong. And when we set our mind to bringing those client relationships together, we can make good progress. And we'll continue to make progress. I think we have one of the most interesting alternatives platforms out there. And I think it's going to continue to grow and scale.
Yeah. Yeah.
By the way, the secular growth in alternatives is one of the reasons why I think we're very, very well positioned.
For sure. And you guys have, as you touched on, a wealth business. We're here at UBS Conference. You've got a very wealth-centric firm. So I'd love to drill down there. And you touched on the ultra-high net worth nature of your wealth business. So it's differentiated. You hit on very briefly a couple of the components of growth that you're focused on. But I'd love to hear a little bit more and drill down on that if you don't mind.
So with respect to wealth?
Yeah.
I mean, so first, in the ultra-high net worth business, as I said, you scale with more people and more footprint. It's a very fragmented business. Our U.S. share, which I think in the ultra-high net worth segment is the highest, is still mid-single digits. It's a very fragmented business, so there's still opportunity to consolidate and grow share in that business globally, and we will continue to do that. I think there are other opportunities for us, given the scale of our asset management and our wealth platform around third-party wealth, and in particular, as access to alternatives grows across the wealth platform, and we're very, very well positioned to take advantage of that secular trend, and so we have a significant focus on third-party wealth capabilities and allowing our manufacturing capacity from our asset management business to drive access to other people's wealth platforms.
We have an open architecture platform. I think that's an enormous opportunity. I do think at the moment, if you look broadly across the wealth spectrum, there's a very, very small component of alternatives. I think that's going to grow. There's opportunity for alternatives to grow in the retirement channel over time. Digitization and tokenization also create opportunities that open up wealth. The direction of travel for broader connectivity of privates into wealth means we're very, very early in what's going to be a big secular opportunity.
Yep. Yeah. That's been thematic throughout all yesterday. And I expect today too. We'd love to touch on talent. You guys delivered some really impressive comp leverage last year. But it's a competitive business for talent. So how are you thinking about that dynamic in 2025 in terms of the level of competition and how you need to continue to invest as you've referenced the future?
Yeah. Well, I mean, I just start with the fact that when I think about Goldman Sachs and the assets it has that differentiates it, it starts with our talent. It's an extraordinary group of people, an extraordinarily talented organization. I hear constantly from clients around the differentiation of our talent as our clients interact with our talent. And so it is true north for us that talent matters. It's a differentiator. And we operate in a super, super competitive environment. And the competition for our talent, particularly from those in the alternative space, etc., is intense. And so we've worked, our board has worked, and we've worked very, very aggressively to ensure that we're a pay-performance culture. But when we perform, the opportunity for people to really perform, to do incredibly well over time, is deeply embedded in our culture and who we are.
And so we work very hard at it. We're very committed to it. It has to be pay-for-performance. But it's a competitive world. And we're going to ensure that for extraordinarily talented people that make a difference at Goldman Sachs, that they can have enormous opportunities that are just as attractive as lots of other things that they can go out and do.
Right. Right. And efficiency is a big thing that you've been focused on. That was one of the efficiency ratio targets or one of the things that you laid out. So how do you think about the balance in between efficiency and investing? And where do you think the opportunities to reinvest some of those efficiencies are?
Yeah. We're definitely getting more on offense. I think the last couple of years, given some of the regulatory burden, we were more constrained in our ability to invest in certain areas that we want to invest, particularly around technology, which drives automation and optimization in the organization. We have a three-year plan on optimization that we think is quite compelling because it frees up significant additional investment capacity for us inside the firm. And so this is something we focus on every year. I think we've been quite disciplined on our expense growth while growing the firm. And that's another mantra of the firm that we stay incredibly focused on. I think what's going on with technology is creating more opportunity for optimization and optimization across organizations like ours. We are very focused on that and the investments necessary in that.
You'll see us a little bit more on offense. It's our job to deliver returns. It's got to be balanced. I think we're striking a good balance at that as we drive through this journey to achieve our targeted returns. I think there are good opportunities for us. We're going to stay focused on it and continue to optimize the firm any way we can.
Right. One of the ideas and questions around capital is inorganic growth. So you guys have stated several times, so I'll just include it in the question, bar is high. Totally get that. But when you think about, you have done some small M&A in the last few years. You obviously, as we talked about before, have a much more valuable currency today than you have before. So does that change your thinking at all on M&A? And if you would be interested in inorganic, what are the places where you think there's the best opportunity?
My answer to this is probably identical to the answer I gave you last year when you asked the question. I'll repeat it again. First of all, I do think when you have a better currency, okay, this is capital deployment in the business. It's another form of capital deployment in the business, so when you have a better currency, it has to have an impact on your thinking on any individual deal, but again, broadly, if we could find things that could accelerate our Asset and Wealth Management journey, we would consider them, but the bar to do significant things is very, very high. We're deeply rooted in the culture of the firm and our ability to succeed around that, and I'd also highlight, which I know I highlighted last year, the best businesses here are sold. They're not bought.
You don't know when and if they ever come for sale. At the moment, the prices on a lot of these businesses that would be super attractive are high. We're always going to be diligent in thinking about things that can strengthen the firm, that can add to our ability to serve clients, that can drive higher returns for shareholders. There could be opportunities in the coming years to do that. Again, our discipline on significant things is going to be very, very high.
Right. And to give you credit, when you have pursued something and it doesn't seem to be working, you have no issue adjusting.
I think one of my big lessons over the last seven years, things are going to go right. Things are going to go wrong. But absolutely, you have to try things. But you also have to be willing to make decisions and decide not working is working or not right now. So I mean, you've got to be able to make those decisions. And I think the organization has good muscle set around that. If something's not working, we'll make a decision. When you do something significant, though, the level of commitment to it has got to be much greater. And that's why we've always said the bar has got to be enormously high for significant things.
Sure. We're approaching the end of our time. But I wanted to give the audience just a moment to see if there's any questions from the audience. Okay.
I've been very thorough.
What I'd love to do when we're thinking about bringing this conversation home is to think about returns, right? So you've laid out some ambitious goals for ROEs. At the strategic update, you mapped out your path to achieving the mid-teens. How should we think about the key drivers, and what type of environment do you need in order to continue to progress and improve your return profile?
So here's the way to think about the firm. We have our Global Banking and Markets platform. You can go look at the returns for the last five years. The returns, I think, for the last five years have averaged around 16%. Okay? Let's say they don't average 16% for the next five years. They average, I don't know, 14%. Pick a number. Okay? We then have our Asset and Wealth Management platform. We are driving the returns higher. You see that. You see the progress. You know we've got high single-digit durable revenue growth there. You know we're focused on the margins. We've told you we believe we can get those returns to 15% or higher in the coming years. In the meantime, while we've been doing this, we've still had a drag from the platforms. We're working that out.
Last year, the drag between ROE and capital, let's just call it 100 basis points, that's going to go away. We delivered 12.7% last year. Banking and markets at 14, Asset and Wealth Management at 15-plus. That's going to be the whole firm. You can do the math. What are our returns? Mid-teens. That's the journey. We're going to get there. And we're grinding away. And we're going to work at it. And we're making good progress. And can there be environments where that's a little bit lower? Sure. Can there be environments where it's higher? Sure. We've seen that in the last five years. And you'll continue to see that.
The base return structure of the firm with a banking and markets business that through the cycle is running 14%, 15%, 16% and an Asset and Wealth Management platform that we're highly confident as we continue to grow it and scale it, we can make it a mid-teens return or higher. We have a mid-teens return firm, and so we're committed to that. We're going to continue to drive toward it.
Have you ever thought, and the targets are through the cycle, right? But something you just said made me curious. Have you ever thought about what you think the range might be around the mid-teens?
I think there's a distribution in seven or eight years. And then you're going to have outlier years where the distribution can be, by the way, 2021 was an outlier year where the distribution was way higher. You shouldn't expect a lot of those. Can there be outlier years where the distribution is lower? Absolutely. But at the end of the day, and I think this is an important thing to go think about because I think the firm is an incredible steward of capital, go back and look at our book value growth and the growth of the firm over the 25 years that the firm has been public and compare it to others that were on capital-intensive businesses and steward this capital. The relative performance over any five, 10-year period of time is very, very strong. And that's what we're committed to.
We're going to continue to drive that higher.
Well said, David. It's a great note to end on. Thanks for.
Appreciate it. Thank you very much. Appreciate it.