Goldman wins retirement-asset mandates from Verizon and Lockheed
Goldman Sachs said the agreements cover $70 billion in pension and defined-contribution assets as large employers outsource more investment work.
By Daniel Okafor · Business Editor
2 min read
Goldman Sachs has secured mandates to oversee $70 billion in retirement assets for Verizon Communications and Lockheed Martin, the bank said Thursday. The agreements add scale to Goldman’s outsourced investing business, an area that can produce steadier fees than trading and investment banking.
The assets include about $30 billion in pension funds for Verizon and Lockheed Martin, according to Goldman. The bank said the work also covers $40 billion in Verizon defined-contribution retirement assets, a category that commonly includes 401(k) plans.
CNBC reported that the announcement ranks among the larger recent wins in outsourced corporate investing, a growing business in which employers hire outside managers to handle retirement portfolios. The shift comes as some large U.S. companies seek outside expertise for portfolios that span public and private markets, according to CNBC.
Goldman is competing for this work with firms including BlackRock, Russell Investments and Mercer, CNBC reported. The retirement-asset market is measured in the trillions of dollars, and long-running institutional assignments can provide recurring management-fee revenue.
The deals also fit Goldman’s effort to expand businesses with more predictable income. CNBC reported that Goldman wants a larger share of revenue from stable and recurring sources, compared with businesses such as trading and investment banking, where results can swing more sharply with markets and deal activity.
Marc Nachmann, Goldman’s global head of asset and wealth management, said in a statement that large plan sponsors are placing more responsibilities with a single partner that has investment expertise and a broad platform to meet tailored needs.
Goldman’s outsourced chief investment officer business had about $480 billion in assets as of March 31, the firm said. Its wider asset and wealth management division oversees about $3.7 trillion in investments.
The new mandates give Goldman a bigger position in corporate retirement management at a time when employers are rethinking how to administer and invest large plans. For Verizon and Lockheed Martin, the agreements shift a sizable pool of retirement assets to one of Wall Street’s largest asset-management platforms.
This story draws on original reporting from CNBC.