BlackRock Inc. hired a former Goldman Sachs Group Inc. executive to spearhead client business in the increasingly competitive business of managing entire portfolios of assets for corporate pensions, endowments and wealth clients.
Timothy Jennings is expected to start in April as a managing director focused on the firm’s outsourced chief investment officer business in the US after spending about eight years at Goldman Sachs, according to a BlackRock spokesperson.
The two firms compete — alongside consultancies such as Aon and Marsh McLennan’s Mercer — in a lucrative niche of money management known as OCIO. The multitrillion-dollar global business is dominated by a “gang of eight” firms, according to Charles Skorina, who has followed the industry for more than a decade.
“It’s hugely competitive,” Skorina, managing partner of the Charles Skorina & Co. executive search firm, said in a phone interview. “They throw everything they can at it — this is big money.”
A spokesperson for Goldman Sachs declined to comment.
Corporate pensions, nonprofits and foundations have been shifting much of their investing responsibilities to big money managers that have more resources to analyze risks and oversee stocks, bonds and private assets.
The move is also helping institutions pare costs amid market volatility and economic uncertainty.
“We’re seeing very strong interest in outsourcing across the board,” Ryan Marshall, managing director and co-head of BlackRock’s multiasset strategies and solutions group, said in an email.
While definitions of the business vary, BlackRock said it manages about $400 billion in its institutional OCIO business, including insurance assets. That business has grown at an annual rate of about 20% over the past few years.
BlackRock manages billions of dollars for American International Group Inc., the Royal Mail Pension Plan, the Central States Pension Fund and General Dynamics Corp.’s pension. In mid-2021, British Airways’ pension enlisted BlackRock for about £21.5 billion ($27 billion) of assets — a deal that also transferred pension employees to BlackRock.
Goldman Sachs Asset Management, meanwhile, won a roughly £23 billion mandate from BAE Systems’ pension plan in September, and some of the systems’ in-house investment team members are moving to the bank’s asset management arm. Goldman managed about $250 billion in its OCIO business as of June 30.
Mercer, a division of Marsh McLennan, acquired Vanguard Group Inc.’s OCIO business in December.
The OCIO industry’s assets are expected to grow more than 10% annually over the next five years, consulting firm Cerulli Associates said in a report this month.
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