Goldman Sachs buys corporate pension robo-advisor NextCapital

A sign is displayed in the reception area of ​​Goldman Sachs in Sydney, Australia.

David Gray | Reuters

Goldman Sachs has agreed to acquire NextCapital, a Chicago-based fintech company that provides automated advice to corporate retirement plan participants.

The bank said in a statement Tuesday that the deal, the terms of which were not disclosed, will close in the second half of this year. The acquisition ranks among the top five asset management deals completed by New York-based Goldman, according to the Financial Times, which first reported the deal.

Goldman and its rivals, including Morgan Stanley and JPMorgan Chase, have stepped up acquisitions in fintech and asset management in recent years. Banks are working to deepen relationships with key cohorts like corporate employees and diversify income by increasing money management, which is generally a more stable source of income than trading and other activities of Wall Street.

“This acquisition reinforces our strategic goal of creating compelling client solutions in asset management and accelerating our investment in technology to serve the growing defined contribution market,” Goldman CEO David Solomon said in a statement. the press release.

NextCapital was founded in 2014 and recently raised venture funding in 2020, when it said it had total funding of $85 million.

The agreement gives Goldman another tool to offer clients ways for employees to improve their retirement outcomes. The bank, known for its Ayco personal money management offering, said it already had about $350 billion in assets under watch for defined benefit and defined contribution plans.

“Employers are looking to provide their employees with tailored solutions and customizable advice that can better meet individual savings and investment needs,” said Luke Sarsfield, global co-head of Goldman’s asset management division. . “We believe personalization is the future of retirement savings and will drive the next wave of innovative retirement solutions.”

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