Goldman Acquires Stable Value Business

The transaction represents the latest step by GSAM to grow its defined contribution (DC) franchise following last year’s acquisition of Dwight Asset Management, a stable value asset manager based in Burlington, Vermont. It follows GSAM’s July announcement of its intent to establish a new stable value collective trust (see “GSAM to Offer Pooled Stable Value Fund”).

As part of the transaction, John Axtell, DeAWM’s head of stable value, and other key members of the DeAWM stable value management team will join GSAM. Prior to the closing, DeAWM will work with clients to ensure a seamless transition to GSAM or other stable value managers. GSAM currently manages more than $55 billion in defined contribution mandates, including more than $34 billion in stable value assets under supervision.

“GSAM’s acquisition of DeAWM’s stable value business affirms our strong commitment to providing DC plan participants with capital preservation investment options,” said Eric S. Lane and Timothy J. O’Neill, co-heads of the Investment Management Division at Goldman Sachs in New York. “The expert talent and potential client relationships that we gain from this transaction will complement our existing stable value business.”

According to Jerry W. Miller, head of DeAWM Americas, “We are investing significantly in our Americas business and are committed to providing clients with an enhanced range of investment solutions across fixed income, equity and alternative asset classes. As we focus on growing the rest of our platform, we have opted not to participate in the consolidation of the stable value sector. Consequently, we are pleased with the sale of our stable value business to one of the leaders in the space.”

Subject to certain conditions, the transaction is expected to close during the first quarter of 2014.