Goldman Sachs snaps up retirement robo-advisor NextCapital
US multinational investment bank Goldman Sachs is set to acquire robo-advisor NextCapital for an undisclosed sum.
Chicago-based NextCapital is a digital retirement advice provider that partners with US financial institutions to deliver personalised retirement planning as well as workplace retirement plans and individual retirement accounts (IRAs).
Goldman Sachs says the deal will expand the range of services it offers to the growing defined contribution (DC) market, augmenting its existing employee retirement programmes throughout its asset and wealth management businesses.
The firm already works with employers to help them deliver employee retirement programmes, with total defined benefit (DB) and DC assets under supervision of approximately $350 billion.
Goldman Sachs chairman and CEO David Solomon says: “This acquisition furthers our strategic objective of building compelling client solutions in asset management and accelerating our investment in technology to serve the growing defined contribution market.”
Once the transaction is complete in the second half of 2022, the companies expect to provide services to large retirement plans while working with platform clients in an open architecture approach.
Goldman Sachs’ co-head of asset management Luke Sarsfield says: “Employers are looking to provide their employees tailored solutions and customisable advice that can better support individual saving and investing needs to help improve retirement savings outcomes.”
The NextCapital platform will become part of the Multi-Asset Solutions (MAS) business of Goldman Sachs Asset Management, which has approximately $220 billion in assets under supervision.
NextCapital CEO John Patterson adds the deal allows his company to “leverage the resources of a global financial services firm to continue to scale our platform and offer it to new third-party institutional clients and Goldman Sachs’ broader wealth management organisation”.