Successful investment teams will be less likely to leave NN Investment Partners after the acquisition by Goldman Sachs Asset Management (GSAM) because of improved career opportunities, according to Fadi Abuali, chif executive officer of GSAM International.
GSAM completed its acquisition of the Dutch asset manager on Monday. When the firm initially announced its €1.7bn takeover offer in August last year, GSAM said it wanted to turn NN IP into its “global centre of excellence for sustainable investing” as it was adding new capabilities in products including sustainable and impact equity and green bonds.
However, the “excellence” of active asset managers like NN IP lies in the quality of its people. In recent years, the The Hague-based firm has seen several investment teams pack up their bags and leave for greener pastures.
Its latest high-profile departure took place in October 2020 when the firm’s sustainable investing team left for Neuberger Berman. A year earlier, NN IP’s emerging market debt team left for William Blair, another US-based firm.
Speaking to IPE on the occasion of the sealing of GSAM’s acquistion of NN IP this week, Abuali said he was confident history would not repeat itself. The extended career opportunities for NN IP employees that come with the takeover by GSAM make for a more attractive place to work, he said.
“While every business has attrition, I believe that with the expanded platform Goldman has to offer, we will also be providing better career opportunities,” he added, alluding to GSAM’s expertise in illiquid assets such as infrastructure, private equity and private real estate that NN IP is lacking.
Compensation policy
Most high-profile departures at NNIP have been to US-based asset managers, who tend to offer more generous pay packages. Dutch legislation limits financial sector bonuses to a maximum of a 20% of annual salary for companies headquartered in the Netherlands, compared to 100% in the rest of the EU. With NN IP’s acquisition by US-based GSAM, this constraint will now disappear.
Asked whether GSAM will now raise bonuses for high performers, Abuali said: “We will review the compensation policy at NN IP as is customary after an acquisition. We have a strong culture at Goldman Sachs where we reward performance. But we are yet to look at the details.”
The increased set of asset management competencies should also further strengthen GSAM’s fiduciary proposition, reckons Abuali, who recently also announced the acquisition of NextCapital, a US-based open-architecture digital retirement advice provider.
NN IP has 47 fiduciary mandates in the Netherlands, with total fiduciary assets totalling €57bn.
Abuali said: “We currently have around $600bn in institutional assets in Europe [out of a global total of $2.8trn], and are looking to substantially grow that number.”
In addition to becoming GSAM’s “global centre of excellence for sustainable investing”, The Hague will also eclipse London to become the firm’s second-largest centre for asset management after New York.
The Netherlands will also be the firm’s most significant client base in Europe owing to its “very sophisticated” pension system, Abuali added.
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