Goldman Sachs announced on Thursday that it has secured mandates to manage a combined $70 billion in retirement assets for Verizon Communications and Lockheed Martin, marking one of the larger recent deals in the rapidly expanding outsourced corporate investing sector [1]. The mandates consist of approximately $30 billion in pension assets for both Verizon and Lockheed Martin, as well as $40 billion in Verizon defined-contribution retirement assets, which typically include 401(k) plans [1].
This development highlights a growing trend among major U.S. employers to delegate the management of retirement assets to external firms like Goldman Sachs, as the complexity of investment portfolios increases and requires specialized expertise across both public and private markets [1]. The market for managing retirement assets is highly competitive, with firms such as BlackRock, Russell Investments, and Mercer also vying for these long-term institutional mandates that provide steady fee revenue [1].
Goldman Sachs aims to leverage this business growth to boost its share of stable and recurring revenues, which are considered more predictable compared to the firm's more volatile trading and investment banking operations [1]. Marc Nachmann, Goldman's global head of asset and wealth management, stated, 'Large plan sponsors are consolidating responsibilities with one partner with the investment expertise and depth of platform to manage their bespoke needs' [1].
As of March 31, Goldman's outsourced chief investment officer business managed about $480 billion in assets, while its broader asset and wealth management division oversaw approximately $3.7 trillion in investments [1].
CONCLUSION
Goldman Sachs' acquisition of $70 billion in retirement asset mandates from Verizon and Lockheed Martin underscores the firm's growing presence in the outsourced asset management market. This move is expected to enhance Goldman's stable, recurring revenue streams and reflects a broader industry trend toward consolidation among large plan sponsors.