On Wednesday, Goldman Sachs Asset Management (GSAM), a wing of
The Goldman Sachs Group Inc.
), announced an agreement to acquire the stable value business
from Germany-based Deutsche Asset & Wealth Management (DeAWM)
with total assets under supervision of $21.6 billion as of Jun
30, 2013. DeAWM is a part of
Deutsche Bank AG
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Terms of the deal were not disclosed. The agreement, which
follows GSAM's intention to set up a new stable value collective
trust as announced in Jul 2013, is expected to close in the first
quarter of 2014. Moreover, the transaction is subject to certain
DeAWM, one of the world's leading investment organizations, has
$1.2 trillion (€946 billion) of assets under management as of Jun
30, 2013. The firm focuses in providing traditional and
alternative investments across all major asset classes. It also
serves with customized wealth management solutions and private
banking services to high-net-worth individuals and family
Among the various savings investment options available, "stable
value" has been accredited as the most acceptable investment plan
among millions of people, who are on the verge of retirement.
Among Goldman's business segments, Investment Management includes
management and other fees related to the company's assets that
include Goldman Sachs Asset Management, Private Wealth Management
and management businesses including the company's merchant
banking funds. This segment contributed approximately 14% of the
net revenues earned by the company in the first half of 2013.
The acquisition of DeAWM will help Goldman gain significant
market share in the defined contribution investment-only
business. Moreover, the bank would be able to prosper in
this business and provide more investment plans to help retired
people capitalize on their hard earned savings. Notably, GSAM
manages over $55 billion in defined contribution mandates, which
includes more than $34 billion in stable value assets under
On the other hand, the completion of the deal will furnish DeAWM
with more capital. Therefore, the amount will be redeployed by
the firm in enhancing its range of investment solutions across
fixed income, equity and alternative asset classes.
This deal gives Goldman full opportunity to leverage its strong
corporate trust market reputation with DeAWM's experience and
proficiency in inventive stable value solutions, which would
offer enhanced investment options to its clients. Last year,
Goldman also acquired a Vermont-based stable value investment
firm - Dwight Asset Management Company from Old Mutual Asset
Management (OMAM), thereby enhancing its business.
Goldman currently carries a Zacks Rank #3 (Hold). Some better
performing banks include
Capital One Financial Corp.
) with a Zacks Rank #2 (Buy).