Goldman Completes Dwight Acquisition

On Tuesday, Goldman Sachs Asset Management (GSAM), a wing of The Goldman Sachs Group Inc. (GS - Analyst Report), completed the acquisition of Vermont-based Dwight Asset Management Company from Old Mutual Asset Management (OMAM). OMAM is a part of London-based savings group, Old Mutual.

Dwight, a stable value investment firm will now operate as a wholly owned subsidiary of GSAM and will be renamed as Dwight Asset Management, a Goldman Sachs Company. The new entity will continue to be headquartered in Vermont.

The firm specializes in providing fixed income investment management services including retirement plans, public funds, corporations and other institutions to institutional clients. Dwight intends to provide secure and steady returns to investors like money market funds.

Among various savings investment options available, “stable value” has been accredited as the most acceptable investment plan among millions of people on the verge of retirement.

Among Goldman’s business segments, Investment Management includes management and other fees related to the company’s assets Goldman Sachs Asset Management, Private Wealth Management and management businesses including the company’s merchant banking funds. This segment contributed approximately 12% of the total revenue earned by the company in first quarter 2012.

The acquisition of Dwight will help Goldman gain significant market share in the defined contribution investment-only business. The completion of the deal has also furnished OMAM with more capital.

Therefore, the amount will be redeployed by the firm into global distribution and asset management franchise, which would help in building multi-boutique investment business over the long term. OMAM manages and expands a varied portfolio of asset managers serving various institutional and individual investors.

This deal gives Goldman full opportunity to leverage its strong corporate trust market reputation with Dwight’s experience and proficiency in inventive stable value solutions, which would offer enhanced investment options to its clients.

Goldman currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Among Goldman’s peers, Morgan Stanley (MS - Analyst Report) also retains a Zacks #3 Rank.