Goldman Sachs Group announced on Thursday that it has secured two significant asset management mandates, winning the right to manage a combined $700 billion in retirement assets for Verizon Communications and Lockheed Martin. This represents one of the largest recent announcements in the rapidly growing market for outsourced investment management services.
The firm stated that approximately $300 billion of the newly entrusted assets come from the pension plans of Verizon and Lockheed Martin. An additional $400 billion originates from Verizon's defined contribution retirement plan, a type of account commonly associated with U.S. 401(k) corporate pension schemes.
These partnerships underscore a trend where major U.S. corporate employers are increasingly turning to external managers like Goldman Sachs to handle their retirement assets. This shift is driven by the growing complexity of investment portfolios and the need for specialized expertise spanning both public and private markets.
The competition within the multi-trillion-dollar retirement asset management sector is intense, with firms such as Goldman Sachs, BlackRock, Russell Investments, and Mercer all vying for business. The appeal lies in the stable fee income that long-term institutional mandates can provide.
Goldman Sachs aims to use the expansion of this business line to increase the proportion of stable, recurring revenue within its overall earnings mix, creating a contrast with its more volatile trading and investment banking operations.
Marc Nachmann, Global Head of Asset and Wealth Management at Goldman Sachs, commented in a statement: "Large pension plan sponsors are increasingly looking to consolidate their partnerships, choosing a single provider with both investment expertise and a comprehensive platform to meet their customized asset management needs."
As of March 31, Goldman Sachs's outsourced Chief Investment Officer (OCIO) business managed approximately $480 billion in assets. The firm's overall Asset and Wealth Management division oversees total invested assets of around $3.7 trillion.