Goldman Sachs announced Thursday it secured deals to manage a combined $70 billion in retirement assets for Verizon Communications and Lockheed Martin. The mandates include approximately $30 billion in pension assets for both companies and $40 billion in Verizon defined-contribution retirement assets, typically 401(k)s. Large employers are increasingly outsourcing retirement asset management to external firms as portfolios grow more complex and require expertise across public and private markets, according to Goldman. The multitrillion-dollar retirement asset management market remains highly competitive among managers including Goldman, BlackRock, Russell Investments, and Mercer, with long-term institutional mandates generating steady fee revenue.
Goldman Secures $30 Billion Pension Assets and $40 Billion Defined-Contribution Mandates
The mandates comprise about $30 billion in pension assets for Verizon and Lockheed Martin combined, alongside $40 billion in Verizon defined-contribution retirement assets, according to Goldman Sachs. Defined-contribution assets typically consist of 401(k) plans. The deals represent one of the larger recent announcements in the fast-growing market for outsourced corporate investing.
Corporate Employers Consolidate Retirement Asset Management Responsibilities
The moves underscore how some of America's largest employers are handing responsibility for managing retirement assets to outside firms like Goldman as portfolios become more complex and require expertise across public and private markets. "Large plan sponsors are consolidating responsibilities with one partner with the investment expertise and depth of platform to manage their bespoke needs," Marc Nachmann, Goldman's global head of asset and wealth management, said in a statement. Competition in the multitrillion-dollar market for retirement assets is fierce among managers including Goldman, BlackRock, Russell Investments, and Mercer, because the long-term institutional mandates generate steady fee revenue.
Goldman's OCIO Business Manages $480 Billion in Assets
Goldman's outsourced chief investment officer business had about $480 billion in assets as of March 31, according to the firm. The broader asset and wealth management division oversees roughly $3.7 trillion worth of investments. By growing the retirement asset management business, Goldman aims to increase its share of revenues that are seen as stable and recurring, unlike the more volatile trading and investment banking operations.
FAQ
What did Goldman Sachs announce on Thursday regarding Verizon and Lockheed Martin?
Goldman Sachs announced Thursday it won deals to manage a combined $70 billion in retirement assets for Verizon Communications and Lockheed Martin, including approximately $30 billion in pension assets and $40 billion in Verizon defined-contribution retirement assets.
Why are large employers outsourcing retirement asset management to firms like Goldman Sachs?
Large employers are outsourcing retirement asset management to external firms as portfolios become more complex and require expertise across public and private markets, according to Goldman Sachs. Plan sponsors are consolidating responsibilities with one partner that has the investment expertise and platform depth to manage their specific needs.
How much does Goldman Sachs' outsourced chief investment officer business manage?
Goldman's outsourced chief investment officer business had about $480 billion in assets as of March 31, while the firm's broader asset and wealth management division oversees roughly $3.7 trillion worth of investments.
