Goldman, Charlesbank to Invest in Pensionmark Parent World Insurance

World Insurance Associates LLC, which acquired retirement plan and wealth advisory Pensionmark Financial Group last year, is poised to get a $1 billion capital infusion from the Goldman Sachs Group Inc.’s asset management division, the firms announced Tuesday.

Goldman Sachs Asset Management, through its private equity and hybrid capital teams, is joining Charlesbank Capital Partners as co-lead investors to fuel growth plans for the insurance brokerage aggregator, including acquisitions, according to Tuesday’s announcement. In addition to the equity investment, Goldman is leading a subordinated debt financing for World, which adds up to a total of more than $1 billion in investments.

The announcement means further capital to fuel Pensionmark’s wealth management acquisition push, as well as organic capabilities and technology for its current advisers, says Pensionmark CEO Troy Hammond, who founded and eventually sold the firm to World Insurance.

“I’m not sure there’s a better partner out there for us, collectively at the World level, but certainly for us on the financial services side, in terms of continuing with our growth story,” Hammond says. “A billion dollars is not pocket change. That’s a serious financial commitment.”

Hammond and his team have been adding wealth management services to Pensionmark’s workplace retirement plan practice to build a more holistic financial offering, including insurance and benefit capabilities from parent World.

The transaction is expected to close in the fourth quarter of the year, subject to customary closing conditions and regulatory approvals, according to the announcement. After closing, World’s management team and employee shareholders will remain major investors alongside Charlesbank and Goldman Sachs, with both investors getting equal representation on the World board of directors. Charlesbank’s investment amount is not publicly available, according to a spokesperson. The private equity investor was World’s first to provide capital in 2020, and the announcement noted that World has a an enterprise value of $3.4 billion.

“Rich and his team have done a fantastic job growing World over the past few years, creating a leading and integrated platform with a broad set of attractive client offerings,” Anthony Arnold, managing director in private equity at Goldman Sachs Asset Management, said in a statement. “We believe our investment and access to both the insurance and wealth management capabilities within Goldman Sachs can help propel the company over the years ahead.”

Hammond noted that the investment is not a controlling stake and that Goldman and Charlesbank are backing the firm’s overall growth plans with the capital infusion.

“We have an investor that understands our business and understands the investments that need to be made to maintain that organic growth,” he says. “The intellectual capital and resources that they can provide to us obviously are going to be very substantive on the financial services side.”

Hammond notes that the money coming at a time of high interest rates also relieves pressure in terms of borrowing costs. While he says the acquisitions market is “still frothy,” he notes that the deal provides capital at a time when some may be concerned with the impact of those higher rates.

“The headline is that this gives us a very long runway of acquisition capital and really is a testimonial to the fact that we are very committed to continue our hyper-charged growth, and we have the right partners and the right capital to do that,” Hammond says. “We’re ready to keep the pedal to the floor here.”