Goldman Sachs Group Inc. has secured mandates to manage a combined $70 billion in retirement assets from two major U.S. corporations, Verizon Communications Inc. and Lockheed Martin Corp.. This move highlights a growing trend where large American firms, facing increasingly complex portfolios spanning public and private markets, are outsourcing their retirement assets to specialized financial institutions.

The mandates were announced on Thursday. They consist of two parts: approximately $30 billion in pension assets from the combined plans of Verizon and Lockheed Martin, and an additional $40 billion from Verizon's defined contribution retirement plans, which are primarily comprised of 401(k) accounts.

This development underscores a significant industry shift. As corporate asset allocations grow more sophisticated, requiring deep investment research capabilities, companies are increasingly turning to external managers like Goldman Sachs to oversee their retirement funds. The market for outsourced chief investment officer (OCIO) services is highly competitive, with firms such as BlackRock Inc., Russell Investments, and Mercer vying for these lucrative, long-term mandates that provide stable, recurring fee-based revenue.

For Goldman Sachs, expanding its presence in this business is a strategic priority to increase the proportion of stable, repeatable revenue streams. This helps counterbalance the inherent volatility of income from its trading and investment banking divisions.

Marc Nachmann, Goldman Sachs' global head of Asset & Wealth Management, stated in a release, "Large pension plan sponsors are increasingly consolidating partnerships and seeking a single provider with investment expertise and a comprehensive platform to meet their bespoke investment needs."

As of March 31, Goldman Sachs' OCIO business managed approximately $480 billion in assets. The firm's overall Asset & Wealth Management division oversees total invested assets of around $3.7 trillion.