Goldman Sachs Asset Management just signed a $21.6-billion deal, but not in the mutual fund business.
Today Eric Lane and Timothy O'Neill, co-heads of Goldman's investment management division, unveiled a deal to buy the stable value slice of Deutsche Asset & Wealth Management's (DeAWM). Stable value is a niche fixed income asset class and product type used inside retirement plans like 401(k)s.
Check back for more information as this story develops.
Company Press Release
Sept. 25, 2013, 11:55 a.m. EDT
Goldman Sachs Asset Management to Acquire Stable Value Business from Deutsche Asset & Wealth Management
GSAM Increases Focus on Defined Contribution Business
NEW YORK, Sep 25, 2013 -- Goldman Sachs Asset Management ("GSAM") announced today it has entered into an agreement with Deutsche Asset & Wealth Management ("DeAWM") to acquire DeAWM's stable value* business, with total assets under supervision of $21.6 billion as of June 30, 2013. The transaction represents the latest step by GSAM to grow its defined contribution (DC) franchise following last year's acquisition of Dwight Asset Management ("Dwight"), a premier stable value asset manager based in Burlington, VT.
"GSAM's acquisition of DeAWM's stable value business affirms our strong commitment to providing defined contribution plan participants with capital preservation investment options," said Eric S. Lane and Timothy J. O'Neill, co-heads of the Investment Management Division at Goldman Sachs. "The expert talent and potential client relationships that we gain from this transaction will complement our existing stable value business."
Jerry W. Miller, Head of DeAWM Americas, said: "We are investing significantly in our Americas business and are committed to providing clients with an enhanced range of investment solutions across fixed income, equity and alternative asset classes. As we focus on growing the rest of our platform, we have opted not to participate in the consolidation of the stable value sector. Consequently, we are pleased with the sale of our stable value business to one of the leaders in the space."
This transaction follows GSAM's July 2013 announcement of its intent to establish a new stable value collective trust.
As part of this transaction, John Axtell, DeAWM's Head of Stable Value, and other key members of the DeAWM stable value management team will join GSAM. Prior to the closing, DeAWM will be working with clients to ensure a seamless transition to GSAM or other stable value managers. GSAM currently manages over $55 billion in defined contribution mandates, including more than $34 billion in stable value assets under supervision.**
Subject to certain conditions, the transaction is expected to close during the first quarter of 2014.
Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. GS -0.11% , which oversees $955 billion in assets under supervision as of June 30, 2013. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
With $1.2 trillion (EUR946 billion) of assets under management (as at June 30, 2013), Deutsche Asset & Wealth Management*** is one of the world's leading investment organizations. Deutsche Asset & Wealth Management offers individuals and institutions traditional and alternative investments across all major asset classes. It also provides tailored wealth management solutions and private banking services to high-net-worth individuals and family offices.
*Stable value funds are capital preservation investment options available in U.S. retirement savings plans. They invest in a high quality, diversified fixed income portfolio that is protected against interest rate volatility by wrap contracts from banks and insurance companies. **Source: GSAM, June 30, 2013. Assets Under Supervision (AUS) includes client accounts for which Goldman Sachs does not have full discretion. ***Deutsche Asset & Wealth Management is the brand name of the Asset & Wealth Management division of the Deutsche Bank Group. The legal entities offering products or services under the Deutsche Asset & Wealth Management brand are listed in contracts, sales materials and other product information documents.