Goldman Plans 40% Bigger Nordic Team in Asset Management Bid
Goldman Sachs is expanding its Nordic headcount by 40% as the Wall Street firm targets a bigger share of asset management and investment banking services in one of the world’s richest regions.
Peter Hermann, who runs Goldman’s European pension and insurance strategies unit, says the expansion means the bank will have 70 people spread across offices in Copenhagen and Stockholm by the end of the year. The hiring round reflects “a global strategy to move closer to our clients,” Hermann said in an interview at the bank’s offices in Copenhagen.
The Nordic savings industry is among the world’s largest per capita. The accumulation of wealth in the region already has other Wall Street banks expanding there. Citigroup Inc. recently took over Nordea Bank Abp’s sub-custody services operations in a bet it can build the scale needed to dominate that market.
Thomas Konig, Goldman’s head of asset management for the Nordic region, says pension and insurance companies are “the core” of Goldman’s focus around which it plans to “build our business” in the region.
“In the Nordics, especially, you’ll see pensions, insurance, wealth management, asset management blending in together,” Konig said. “For us, it’s a clear country strategy that everything that is relevant in Denmark we will cover from this office.”
Partnering on investments into alternative assets such as infrastructure and real estate will be a key focus. Konig says his group is broadening its approach to such deals, which have long been a core strategy for the bank.
Goldman is now looking to do deals “with large banks, large distribution platforms, but also with the smaller investors, mid-sized investors, to find opportunities that you don’t see unless you’re on the ground,” Konig said.
Asset managers are trying to persuade investment clients such as pension funds that they can deliver low-risk returns that match their long-term obligations. That’s against an environment of negative interest rates, with Denmark setting the world record for the longest stint below zero (since 2012).
Nordic pension funds and life insurers now routinely plow money into alternative assets, joining with other large investors on big projects such as wind farms and electric vehicle battery plants as bond yields continue to hover at historic lows.
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“What’s really important for us are partnerships,” Konig said. “And partnerships are just difficult to do at a distance.”
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