Goldman Sachs has secured mandates to oversee a combined $70 billion in retirement assets for Verizon Communications and Lockheed Martin, strengthening its position in one of the fastest-growing segments of the investment management industry as large corporations increasingly outsource the management of employee retirement savings.
The mandates rank among the largest outsourced retirement asset awards announced in recent years and underscore a structural shift in how some of America’s biggest employers manage pension funds and defined-contribution retirement plans.
According to Goldman Sachs, the appointments cover approximately $30 billion in pension assets belonging to Verizon and Lockheed Martin, as well as $40 billion in Verizon’s defined-contribution retirement plans, which primarily consist of 401(k) accounts.
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The latest wins expand Goldman’s presence in the outsourced chief investment officer (OCIO) market, where asset managers assume responsibility for constructing portfolios, allocating capital, selecting external managers, overseeing risk, and adjusting investment strategies on behalf of institutional clients.
The business has become increasingly important across the financial industry as corporations contend with more complex investment environments, heightened market volatility, higher interest rates, changing regulations and growing allocations to private markets such as private equity, private credit, infrastructure and real estate.
Many companies are now choosing to delegate day-to-day portfolio management to specialist firms with global research capabilities and access to a broader range of investment opportunities rather than maintaining large in-house investment teams.
The trend is reshaping institutional asset management and creating an increasingly lucrative business for global investment firms.
Stable Fees In An Unpredictable Market
The mandates represent more than an increase in assets under management for Goldman Sachs. Analysts believe they also reinforce the firm’s long-term strategy of expanding businesses that generate recurring fee income, helping reduce its dependence on investment banking and trading operations, whose earnings can fluctuate significantly with market conditions.
Unlike advisory work on mergers or capital raisings, or revenue from securities trading, retirement mandates typically span many years and produce predictable management fees regardless of short-term market cycles.
That stability has made the OCIO business one of the industry’s most fiercely contested markets.
Global investment firms, including BlackRock, Russell Investments, and Mercer, are competing aggressively for a share of the multitrillion-dollar retirement assets managed on behalf of pension funds, corporations, universities, foundations, and other institutional investors. Winning large mandates from household-name companies such as Verizon and Lockheed Martin not only increases assets under management but also enhances an asset manager’s reputation when competing for future institutional business.
The awards also show that institutional investors are reducing the number of firms managing their assets. Instead of dividing portfolios among numerous investment managers, many plan sponsors now prefer to consolidate responsibilities with a single adviser capable of managing sophisticated investment strategies across both traditional and alternative asset classes.
Marc Nachmann, Goldman’s Global Head of Asset and Wealth Management, said that the trend is becoming more pronounced.
“Large plan sponsors are consolidating responsibilities with one partner with the investment expertise and depth of platform to manage their bespoke needs,” he said.
His comments point to a broader evolution in institutional investing. Modern retirement portfolios are no longer built primarily around publicly traded stocks and bonds. Many now include private equity, infrastructure projects, private credit, hedge funds and other alternative investments that require specialized expertise, extensive due diligence and ongoing oversight.
As investment strategies become more diversified, many employers have concluded that outsourcing portfolio management can improve governance, strengthen risk management, and potentially enhance long-term investment performance while reducing internal administrative burdens.
A Growing Pillar of Goldman Sachs
The latest mandates further cement asset and wealth management as one of Goldman’s most important growth engines. As of March 31, the firm’s outsourced chief investment officer business managed approximately $480 billion in assets. Its broader Asset and Wealth Management division oversees roughly $3.7 trillion, making it one of the world’s largest investment managers and an increasingly important contributor to the bank’s earnings.
Growing this business is central to Chief Executive David Solomon’s plan of making Goldman’s revenue base more balanced and resilient by increasing the share of earnings derived from recurring management fees. The plan has gained added importance as investment banking activity and capital markets revenues have remained susceptible to swings in interest rates, geopolitical uncertainty, and shifting investor sentiment.
What It Means For Verizon And Lockheed Martin
For Verizon and Lockheed Martin, outsourcing larger portions of their retirement assets allows management teams to focus on their core businesses while relying on a specialist investment manager to navigate complex financial markets.
Pension plans and defined-contribution schemes face mounting pressure to generate competitive long-term returns while managing inflation risks, changing demographic profiles and evolving regulatory requirements. Partnering with a global asset manager provides access to dedicated research teams, sophisticated portfolio construction tools, advanced risk analytics and investment opportunities that may not be practical to manage internally.
The mandates therefore represent more than a transfer of investment responsibilities. They illustrate how corporate retirement management is becoming increasingly institutionalized, with companies placing greater emphasis on specialist expertise, scale and operational efficiency.