October 17, 2021

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Goldman Sachs wants a larger piece of Europe’s $29 trillion asset administration enterprise

The US investment lender revealed Thursday that it has agreed to get NN Investment decision Associates, which has $355 billion in belongings under management, from insurance policy enterprise NN Team (NNGPF).

“This transaction will bring assets less than [our] supervision in Europe to above $600 billion, aligning with the firm’s strategic targets to scale its European business enterprise and extend its world wide arrive at,” Goldman Sachs claimed in a assertion.

There are approximately €25 trillion ($29.2 trillion) in belongings below management in Europe, in accordance to the European Fund and Asset Administration Association (EFAMA), producing it the second greatest sector immediately after the United States.

Current growth has been driven by the solid effectiveness of fiscal marketplaces, which has in flip greater flows into investment cash. Major gamers in the European sector consist of US companies these kinds of as BlackRock (BLK) and State Avenue (STT), as nicely as Authorized & General (LGGNY) in Britain, Germany’s Allianz (ALIZF), France’s Amundi, AXA (AXAHF) and BNP Paribas (BNPQY), and UBS (UBS) of Switzerland.
The offer for NN Financial commitment Partners varieties component of a broader thrust under Goldman Sachs CEO David Solomon to extend in asset and prosperity administration, reducing the bank’s reliance on risky trading earnings. “This acquisition permits us to speed up our expansion method and broaden our asset management system,” Solomon claimed on Thursday.
Goldman by now has sizable expense banking operations in Europe and delivers financial savings accounts in the United Kingdom beneath its Marcus brand name.

Its asset administration device claimed record revenue in the next quarter, but most of it was generated by fairness investments built with the firm’s possess cash fairly than from service fees for controlling assets on behalf of customers.

As portion of Thursday’s deal, Goldman Sachs Asset Administration will choose over administration of $190 billion for NN Team, which sorts part of NN Expenditure Partners’ assets under administration.

In a report in November 2020, EFAMA highlighted the “enormous possibility” for 3rd-occasion asset managers to raise their share of institutions’ have inner swimming pools of funds, which reached €48 trillion ($56 trillion) in 2019.

NN Financial commitment Companions also has a sturdy placement in environmental, social and company governance (ESG) investing, which Solomon claimed mirrors Goldman’s “possess degree of ambition to put dependable investing and stewardship at the heart of our small business.”

The transaction is anticipated to close by the conclude of the initially quarter of 2022 and arrives amid widespread consolidation in the asset management business, as fees and revenue arrive beneath tension from increased competitors and regulatory expenditures.