Goldman Sachs Asset Management has landed one of the biggest fiduciary management mandates in a multi-country deal with oil giant Shell.
The company has agreed to take over the management of approximately $40bn (£29.5bn) of assets, including the main UK defined benefit scheme, the £11.1bn Shell Contributory Pension Plan.
The total consists of separate awards from Shell pension entities in six different jurisdictions, including the UK, Germany, and North America, according to a press release from Goldman Sachs Asset Management (GSAM). It includes the management of some liability-driven and cashflow-driven investment strategies.
Each pension fund involved set its own criteria in a competitive process overseen by consultancy group Isio, for what GSAM calls “outsourced chief investment officer” (OCIO) arrangements.
Pensions Expert understands that some staff from Shell’s in-house teams are to transfer to GSAM as part of the arrangement. Asset transitions are expected to be completed later this year, according to the asset manager.
The agreements bring GSAM’s total fiduciary management assets worldwide to almost $450bn. Taking on large schemes in the UK and Germany has helped the firm significantly expand its European footprint.
Marc Nachmann, global head of asset and wealth management at Goldman Sachs, said: “Pension funds, insurers and other asset owners increasingly want differentiated alpha, holistic total portfolio advice, and customised portfolio solutions, delivered through an exceptional client experience…
“We are proud that Shell’s pension fund trustees across several countries have chosen to partner with us to deliver the full capabilities of Goldman Sachs for their members.”
Chloe Kipling, co-head of institutional client coverage for Europe, the Middle East, and Africa at GSAM, added: “Our approach to OCIO services is underpinned by extensive risk management experience and driven by a focus on building strong client partnerships. We look forward to implementing bespoke solutions that seek to manage risk, generate cashflow, and deliver sustainable returns on behalf of members of the Shell international plans.”
In a recent report on the fiduciary management and OCIO market, Isio said it expected more large pension schemes to consider this option as trustee boards and sponsors “look to enhance their governance approach and reassess the suitability of their in-house teams”.
Isio’s report stated: “A reduced focus on defined benefit schemes, derisked portfolios, and a waning expertise within trustee boards (as lay trustees retire) is likely to accelerate this. We believe that more schemes with greater than £1bn in assets under management will consider an OCIO approach.”
