BAE Systems, London, outsourced the management of about £23 billion ($29.2 billion) in U.K. pension fund assets to Goldman Sachs Asset Management.
The deal will also see the in-house investment team at BAE Systems Pension Funds Investment Management move to GSAM.
The arrangement relates to the BAE Systems Pension Scheme and the BAE Systems Executive Pension Scheme. Pensions & Investments first reported that the arms, security and aerospace company was in talks to outsource the investment management of its U.K. pension funds last month.
Ed Francis, head of U.K. fiduciary management at GSAM, confirmed the team of 49 would all be offered roles at GSAM, many initially working primarily on the BAE pension funds but over time being integrated fully into the team and working across other GSAM clients.
The hire of GSAM follows a competitive tender process, a news release said.
"Through proactive actions of BAE Systems PLC, in our role as scheme sponsor, the trustees and the excellent work of our in-house investment management team, the pension funding level has moved from a significant deficit to a surplus," said Brad Greve, group finance director at BAE Systems, in the news release. "As we continue to look at ways to further derisk pension liabilities, reducing the cost and improving the efficiency of asset management are essential. Goldman Sachs Asset Management will offer both, and we're pleased that our in-house team will have access to the broader career paths available within such a global leader. This move doesn't limit BAE Systems' flexibility in exploring further ways of reducing our pension risk, and we'll continue to be dynamic in managing this risk going forward," Mr. Greve said.
GSAM's Mr. Francis said in the same release: "We are very pleased to welcome the team to Goldman Sachs — their expertise will continue to provide significant value to the schemes and our broader client base."
The transfer of the assets and team will take place toward the end of the year, the release said. A spokeswoman for BAE Systems confirmed that the assets of the two plans will move to GSAM.
GSAM has global outsourced CIO assets under supervision of more than £200 billion. The firm has more than £2.1 trillion in total assets under supervision.