Goldman Sachs has entered into an agreement to acquire NextCapital Group, a Chicago-based fintech firm that specializes in automated advice for corporate retirement plan recipients.
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The transaction is expected to close in the second half of 2022, subject to regulatory approval and other closing conditions. While financial terms of the deal were not disclosed, a Goldman spokesperson confirmed to FOX Business that the NexCapital acquisition would be among the bank’s top five largest asset management deals.
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“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,” Goldman Sachs chairman and CEO David Solomon said in a statement.
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The deal will give Goldman’s multi-asset solutions business a new tool for sponsors and clients to consider when building a retirement plan. The bank, which currently offers financial counseling and planning services through its Ayco program, has approximately $220 billion in assets under supervision for defined benefit and defined contribution plans.
“Employers are looking to provide their employees tailored solutions and customizable advice that can better support individual saving and investing needs to help improve retirement savings outcomes,” Luke Sarsfield, co-head of Goldman Sachs Asset Management, said in a statement. “We believe personalization represents the future of retirement savings and will drive the next wave of innovative retirement solutions.”
NextCapital CEO John Patterson said that the deal will allow the platform to expand to new clients and leverage resources from a global financial services firm. NextCapital, which was founded in 2014, has raised $85 million in total funding as of September 2020.
The move comes as Goldman has set a new target for its asset and wealth management divisions to generate more than $10 billion in fee-based income by 2024.