Goldman Sachs Group Inc. on Tuesday announced the acquisition of NextCapital Group Inc., a Chicago-based robo-adviser that provides automated advice and digital tools to corporate retirement plan participants.
NextCapital’s platform is expected to become part of Goldman Sachs Asset Management’s multi-asset solutions business when the deal closes in the second half of the year, according to a statement. That business line currently has $220 billion in assets under supervision, ranking it as the largest outsourced chief investment officer provider in the U.S. and the second largest globally.
A Goldman spokesperson confirmed the acquisition is one of the five most expensive purchases for the company’s asset management unit to date. Terms of the deal were not disclosed.
“This acquisition reinforces our strategic goal of creating compelling client solutions in asset management and accelerating our investment in technology,” CEO David Solomon said in the statement.
Goldman’s overall asset management unit already supervises a total of $350 billion in assets in defined-benefit and defined-contribution accounts and will utilize the acquisition to provide new digital tools to its customers.
The storied investment bank has expressed interest in diversifying its business lines in recent years and has shown a willingness to use acquisitions to accelerate that expansion. In 2020, the company agreed to purchase online custodian Folio Investing for an undisclosed price in a push to build out its wealth management division. That followed its blockbuster $750 million deal in 2019 to acquire the hybrid registered investment advisers United Capital.
NextCapital CEO John Patterson said the deal will allow his firm to leverage the resources of a global financial services firm to continue to scale the platform and offer it to new third-party institutional clients. The company currently provides clients with tools designed for portfolio tracking, planning, savings advice and portfolio management.
The Chicago-based fintech has raised more than $82 million in funding since 2014 and has numerous deals for managed account services with major financial firms, including Massachusetts Mutual Life Insurance Co., State Street Global Advisors, Transamerica Life Insurance Co. and Resources Investment Advisors.
“Employers are looking to provide their employees tailored solutions and customizable advice that can better support individual saving and investing needs,” said Luke Sarsfield, global co-head of Goldman Sachs Asset Management. “We believe personalization represents the future of retirement savings and will drive the next wave of innovative retirement solutions.”
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