Goldman Sachs Asset Management is purchasing the portion of Veruss outsourced chief investment officer business that is focused on large pension plans.
Verus, based in Seattle, will transfer $21 billion in assets under supervision to GSAMs outsourcing business, which provides customized asset allocation, portfolio construction, and risk management to corporate pensions, endowments, foundations and insurers. Delta Air Liness pension plan is one of the large clients being transferred to GSAM, according to a person with knowledge of the deal. The purchase, expected to be announced as soon as today, should close by the middle of the year.
A GSAM spokesman declined to comment on any Verus clients.
Jeffrey Scott, who is CIO of Verus and runs its strategic partnership business, will be joining GSAM, whose outsourcing business represents $93.5 billion in client assets. Veruss deputy CIO Omer Tareen, Scott Day, a managing director, and several supporting portfolio management staff and analysts will also join GSAM. Scott, the former CIO of the Alaska Permanent Fund Corp., joined Verus in 2011.
Verus will continue to provide outsourcing services to mid-market institutional clients with assets below $5 billion. Jeffrey MacLean, the firms CEO, says its large plan business required technical and operational support that was not key to its core business of mid-market plans.
This transaction allows Verus to go back to our original strategy, which is to focus on OCIO opportunities that are more in keeping with where we believe the market is: plans that are smaller than $5 bill and have no internal staffs, MacLean says. Verus will also keep its traditional consulting, risk management and private markets consulting businesses.
Goldman recently made a similar acquisition. GSAM announced in 2015 a deal to buy Pacific Global Advisors, a provider of investment and risk management services to large pension plans, from Pacific Life Insurance Company. The business had more than $18 billion of assets under supervision at the time.