A New York state pension fund has offered Goldman Sachs Department Inc $2 billion to invest with outside managers, Goldman and the fund said in a statement on Wednesday, a first for a fund that’s typically selected managers itself.
Officials in charge of managing the $180.7 billion New york city State Common Retirement Fund wanted to invest more in markets outside the U.S. and decided it was best to outsource the job to a business that’d the skills and resources to put money to work quickly, personnel in the New York comptroller’s office said.
In talks with fund officials over the past year, Goldman executives provided an analysis of the fund’s allocations based upon openly offered information and recommended locations it might enhance, such as where to spend the threat budget and whether to be more active or passive in specific portfolios, said the comptroller staffers, who spoke on the condition they not be called.
Those analytics, combined with the size of Goldman’s fund selection and due diligence team and a competitive pricing structure led the comptroller’s workplace to partner with the bank.
The collaboration is the most up to date step in Goldman’s effort to grow its financial investment management company, as brand-new policies and lower trading volume have pressed revenues in other businesses the bank has actually generally relied on for development.
The office of New york city State Comptroller Thomas P. DiNapoli is in talks with other possible partners to ink similar offers, staff said.
Under the agreement with Goldman, the bank’s Option Investments and Manager Choice (AIMS) Group will choose managers for $2 billion worth of the pension fund’s stock portfolio that concentrates on making financial investments abroad with active managers. The fund is likewise in talks with Goldman about so-called ‘sustainable investments,’ which concentrate on environmentally friendly or socially responsible business.
The handle New York isn’t the very first business Goldman has actually won with a state pension fund but it’s the biggest. In 2008, South Carolina Retirement Systems went into a $1.5 billion partnership with the bank’s investment management unit and in 2010, the Alaska Permanent Fund granted it over $500 million.
AIMS, which had $156 billion in possessions under guidance at June 30, is an ‘open architecture’ platform, which means none of the investments Goldman picks can be invested in funds that the bank’s own portfolio managers manage.
Goldman and the pension fund declined to comment on charges.
(Reporting by Lauren Tara LaCapra, Editing by Bernard Orr)