U.S. parcel delivery giant UPS UPS-N has enlisted the asset management arm of Wall Street titan Goldman Sachs GS-N to manage its $43.4-billion pension fund assets in the United States and Canada, the investment bank said on Thursday.
The deal underscores the growing significance of the asset management business as Goldman looks to reduce its dependence on the volatile trading and investment banking.
Closest rival Morgan Stanley has been more successful in steering away from its traditional investment banking roots by expanding into wealth management.
Goldman Sachs supervises more than $2.8-trillion of assets as of March 31, compared with nearly $7-trillion for Morgan Stanley.
For UPS, the arrangement will help it increase focus on its core business. Big employers often outsource the management of their pension funds to firms that have more experience navigating the financial markets.
“This decision also allows UPS to place our focus more squarely on serving our customers while adding more oversight and expertise that will benefit retirees,” said PJ Guido, Investor Relations Officer at UPS.
The in-house investment management team of UPS will join Goldman Sachs’ Atlanta office and continue to provide services to the pension plans.
The companies expect the team transition to Goldman Sachs to take place in the third quarter.
This change will not alter any benefits plan participants receive or how the plans are administered, a UPS spokesperson said.