Goldman Sachs struck the biggest deal since David Solomon became CEO in 2018. The asset management division of the US group acquired the European asset manager, NN Investment Partners, from the Dutch NN Group NV for approximately 1.6 billion euros (1.87 billion dollars). The deal, to be precise, consists of a basic purchase price of € 1.52 billion and a ticking fee and excess capital to be distributed as a dividend. The closing of the transaction is expected by the end of the first quarter of 2022, naturally remains subject to approvals and regulatory conditions.
The industrial logic is there: NN Investment Partners is very complementary to Goldman Sachs Asset Management’s current European footprint and will strengthen its fund management and distribution platform. Last year NN Group came under pressure from activist hedge fund, Elliott Management, to improve returns and streamline its businesses. In April, it announced that it was considering options for its investment management business, including a merger, joint venture or partial disposal of the division, which has more than 900 employees in 15 countries.
Headquartered in The Hague, The Netherlands, NN Investment Partners has approximately $ 355 billion in assets under management and approximately $ 70 billion in consulting business. Further demonstration of Solomon’s determination to grow the US bank in areas with regular fees, such as wealth management, while reducing its reliance on volatile assets such as trading stocks and bonds. Solomon himself remarked that “this acquisition allows us to accelerate our growth strategy and expand our wealth management platform”.
Goldman Sachs Asset Management, which has $ 2.3 trillion in assets under management and with this transaction will bring assets under management in Europe to over $ 600 billion, beat Frankfurt asset manager DWS in the final round for win NN Investment Partners. Ubs Asset Management, Janus Henderson and Prudential Financial also showed interest. “Everything NN does, we already do, and this is adding and accelerating our growth. And it continues to help us grow,” Solomon told the Financial Times.
Wealth managers globally are looking to scale up to protect profits from rising costs and falling fees. “If you look at most of the major players, the thing most of them have is that their businesses are global and on a scale,” Solomon said.
As part of the deal, Goldman Sachs Asset Management enters into a long-term strategic partnership agreement with NN Group to manage an approximately $ 190 billion portfolio of assets, which will make the company the largest unaffiliated insurance asset manager globally. , with over $ 550 billion in assets under management. A foundation for further growth of the company’s European trust business, building on the success of its platform in the US and UK.
“Being a partner of the NN Group for their insurance business in the future is an attractive opportunity for us,” continued Solomon. For its part, NN Investment Partners has a strong position in ESG investing, particularly in areas such as green bonds, impact equity and sustainable equity. “We are focused on responding to the ESG needs and wishes of our customers,” concluded the top manager.
David Knibbe, managing director of NN Group, noted that “this transaction brings together two international asset managers, each with many decades of investment experience. We have found a strong and professional partner in Goldman Sachs.” A deal that will also give NN Group “greater opportunities to develop a broader range of wealth management propositions for our clients. Our ESG approach and ambitions will remain unchanged and Goldman Sachs shares our investment commitment. responsible, “added Knibbe.
Goldman Sachs reported record revenue from wealth management in the second quarter of this year, but only a quarter of that came from managing assets on behalf of clients, the part of the business it wants to expand. The bulk of the revenues, in fact, was generated by investments that the US giant made with its own capital, a source of income that the bank is trying to reduce. Another goal for the next five years is to raise $ 150 billion for alternative asset management vehicles, which include private equity, credit and real estate. (All rights reserved)
