Goldman Sachs has announced that Goldman Sachs Asset Management has entered into an agreement to acquire NextCapital. The transaction is expected to close in the second half of 2022, subject to regulatory and other approvals and conditions.
The transaction will accelerate the expansion of Goldman Sachs’ services to the growing defined contribution market through personalized managed accounts and digital advice. NextCapital, based in Chicago, is an open-architecture digital retirement advice provider that partners with financial institutions across the United States to deliver personalized, customizable retirement planning and managed accounts through workplace retirement plans and individual retirement accounts (IRAs). Its flexible, open-architecture platform enables clients, including asset managers, plan sponsors, advisors and recordkeepers, to meet individual investor demand for more digitalization, retirement income solutions, tailored strategies and insights. Together, the companies anticipate providing services to large retirement plans while working with platform clients in an open architecture approach.
The acquisition of NextCapital will augment existing capabilities throughout Goldman Sachs’ asset and wealth management businesses, providing another tool for sponsors and other clients to consider when constructing a retirement program. NextCapital’s managed account platform currently powers the Goldman Sachs Workplace Retirement Solution, a retirement program for small and mid-sized businesses.
Luke Sarsfield, Co-Head of Goldman Sachs Asset Management, commented: “Employers are looking to provide their employees tailored solutions and customizable advice that can better support individual saving and investing needs to help improve retirement savings outcomes. We believe personalization represents the future of retirement savings and will drive the next wave of innovative retirement solutions.
“Together with NextCapital’s talented team, we will continue to invest in technology to improve the experiences and outcomes of retirement investors and better serve the employers, advisors and financial institutions that support the growing $10 trillion DC market and the even larger IRA segment.”
John Patterson, CEO at NextCapital said, “Our vision for the future of the retirement savings market is aligned with the team at Goldman Sachs: technology that can create a differentiated experience combined with a strong culture and focus on clients forms a powerful offering for our clients and the individuals they serve. We can leverage the resources of a global financial services firm to continue to scale our platform and offer it to new third party institutional clients and Goldman Sachs’ broader wealth management organization.”
Upon closing of the transaction, NextCapital’s platform is expected to become part of the Multi-Asset Solutions (MAS) business of Goldman Sachs Asset Management, which has offered custom multi-asset portfolios from Goldman Sachs and third party asset managers for over 20 years. Led by Greg Calnon, the group has approximately $220 billion in assets under supervision today, ranking it the largest Outsourced Chief Investment Officer (OCIO) provider in the U.S. and second largest globally by outsourced assets under management. Investing in the delivery of solutions for the growing DC market is a core focus of MAS and is supported by the broader capabilities and technology of the firm.
The NextCapital team will continue to be headquartered in Chicago.
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