Goldman lands $70 billion retirement mandate from Verizon and Lockheed
Goldman Sachs says it will oversee retirement assets tied to Verizon and Lockheed Martin as corporate plans get more complex.
By Frankie Delgado · News Reporter
2 min read
Goldman Sachs has picked up a $70 billion retirement-assets haul from two blue-chip giants: Verizon Communications and Lockheed Martin.
The Wall Street firm said it has been hired for mandates covering retirement money at the telecom company and the defense contractor, a major grab in the business of managing corporate investment pools for large employers.
According to Goldman, the work includes about $30 billion in pension assets for Verizon and Lockheed Martin. The firm also said it will oversee $40 billion in Verizon defined-contribution retirement assets, the category that typically includes 401(k) plans.
Corporate retirement money is moving outside
CNBC reported that the assignments are part of a broader shift among major U.S. employers, with more companies turning over responsibility for retirement-asset management to outside investment firms.
The reason, according to CNBC, is complexity. Large retirement portfolios now require investment know-how across public and private markets, pushing some plan sponsors toward firms with bigger platforms and wider specialist teams.
Goldman is one of several firms fighting for a place in that market. CNBC identified BlackRock, Russell Investments and Mercer among the managers competing for mandates in the multitrillion-dollar retirement-assets business.
For asset managers, these jobs can be prized because long-running institutional assignments can provide steadier fees than businesses tied more closely to market swings and deal cycles.
Goldman wants steadier revenue
The deals also fit a bigger push inside Goldman. CNBC reported that the bank wants a larger share of revenue from businesses viewed as stable and recurring, compared with trading and investment banking, which can rise and fall more sharply.
Marc Nachmann, Goldman’s global head of asset and wealth management, said in a statement that large plan sponsors are putting more responsibilities with a single partner that has the investment expertise and platform depth to handle their individual needs.
The retirement assignments sit inside a sizable operation at Goldman. The firm said its outsourced chief investment officer business had about $480 billion in assets as of March 31.
Goldman’s wider asset and wealth management division oversees roughly $3.7 trillion in investments, according to the company.
The Verizon and Lockheed Martin mandates give Goldman another foothold in a corner of finance that may lack the flash of takeover deals or trading desks, but offers something Wall Street prizes: recurring money to manage over long periods.
This story draws on original reporting from CNBC.