We are very pleased to share that FinTech Collective portfolio company NextCapital is being acquired by Goldman Sachs, in what Goldman says is among the five largest asset management deals in its history.
FinTech Collective was first-money into NextCapital, having worked with co-founder Rob Foregger to refine the early concept. Foregger had previously been a co-founder of Personal Capital, executive at Fidelity and founder of Everbank.com before co-founding NextCapital with John Patterson (CEO), Dirk Quayle, and John Hagen.
NextCapital was among our first investments in the wealth tech space, which have included lead and early checks into Quovo (acquired), Openfolio (acquired), Artivest (acquired), Vestwell (raised $70m Series-C in 2021), and NYDIG (raised $1b in 2021).
Our thesis with NextCapital focused on replatforming the tech stack for the $14t defined contribution and IRA retirement asset market.
At the time, robo-advisors were just coming to market, and we felt that the underlying infrastructure supporting the shift from investment product to digital advice was a more durable, interesting space to be allocating capital to.
The Goldman deal follows several moves by multiline incumbents (e.g. Morgan Stanley and JP Morgan) to diversify into steadier income streams and to build out their own stacks in wealth and asset management.
“This acquisition furthers our strategic objective of building compelling client solutions in asset management and accelerating our investment in technology to serve the growing defined contribution market,” - David Solomon, CEO, Goldman Sachs
Goldman last month set a target for its asset and wealth management divisions to generate more than $10b in fee-based income by 2024, up from $7.57b in 2021, when it accounted for about 13% of the bank’s overall revenue.^
We continue to be excited about and are investing in digital infrastructure in the wealth and asset management industry, as retirees face longer lifespans - with underfunded accounts, as the great wealth transfer from boomers to gen-x’rs heats up, and as all investors look to digital advice and services across an increasing range of asset classes.
Congratulations JP, Dirk, Jon, and Rob!
Brooks, Gareth and the FTC team
Press Release - Read more
FT Article - Read more
^Financial Times, March 29, 2022