Goldman Sachs has reached an agreement to acquire NextCapital Group, a Chicago-based fintech company that specializes in automated advice for corporate retirement plan beneficiaries.
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The transaction is expected to close in the second half of 2022, subject to regulatory approval and other closing conditions. Although financial terms of the deal were not disclosed, a Goldman spokesperson confirmed to FOX Business that the acquisition of NexCapital would be among the bank’s top five asset management deals.
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“This acquisition reinforces our strategic goal of creating compelling client solutions in asset management and accelerating our investments in technology to serve the growing defined contribution market,” said David Solomon, Chairman and CEO of Goldman. Sachs, in a statement.
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The deal will give Goldman’s multi-asset solutions business a new tool for sponsors and clients to consider when building a retirement plan. The bank, which currently offers advisory and financial planning services through its Ayco program, has about $220 billion in assets under watch for defined benefit and defined contribution plans.
“Employers seek to provide their employees with tailored solutions and customizable advice that can better meet individual savings and investment needs to help improve retirement savings outcomes,” said Luke Sarsfield, co-head of Goldman Sachs Asset Management, in a statement. “We believe personalization is the future of retirement savings and will drive the next wave of innovative retirement solutions.”
NextCapital CEO John Patterson said the deal will allow the platform to expand to new customers and leverage the resources of a global financial services company. NextCapital, which was founded in 2014, has raised $85 million in total funding from September 2020.
The move comes as Goldman has set a new goal for its asset and wealth management divisions to generate more than $10 billion in fee income by 2024.