Growth private equity firm TA Associates is to back a management buyout (MBO) of Goldman Sachs Asset Management’s (GSAM) Australian-focused investment capabilities and fund platform.
Financial terms of the transaction, which is expected to close by year-end, have not been disclosed. The company will rebrand accordingly.
Since the appointment of Dion Hershan as GSAM’s head of Australia equities in 2007 and the subsequent build out of the investment team, the company has grown to be a leading Australian equities and fixed income fund manager.
The company’s core offering is its Fundamental Australian Equities product set, consisting primarily of long only concentrated strategies. The firm’s fixed income capabilities include multi-asset and hybrid strategies.
GSAM serves the Australian institutional and retail markets, and it also distributes Australian investment products overseas, including in Japan. The company has more than AUD8 billion in assets under management.
TA Associates is partnering with GSAM’s senior management team consisting of Hershan, who will be managing director of the new standalone entity and will continue to lead the Australian equities investment team, focusing on large cap equities; Katie Hudson who will co-lead the Australian equities team, focusing on the small and mid-cap universe; and Roy Keenan who will be fixed income portfolio manager.
“We are very pleased to back the management buyout of this exciting business,” says Edward Sippel, a managing director at TA Associates and co-head of Asia who will join GSAM’s board of directors. “Dion, Katie, Roy and the team have established themselves as a strong and trusted asset manager and have grown the company significantly over the last nine years via a high-quality product suite and an extensive distribution network. As a long-term investor in fund management companies, TA looks forward to supporting their proven investment philosophy, process and strategy.”
“We are confident that we have found the right partner in TA Associates,” says Hershan. “We believe this partnership with such a high-calibre organisation, with its significant experience investing in our industry, will benefit all stakeholders. With TA’s support, we will build upon our strong foundation, continuing to serve our clients, pursuing strong investment returns and further growing our business.”
Sheila Patel (pictured), CEO of International Goldman Sachs Asset Management, says: “TA Associates has offered a compelling opportunity to further grow the Australian focused investment capability and platform for our Australian equities and fixed income clients. In Australia, GSAM will retain our institutional sales and distribution capabilities for our core global products and we will continue to grow the global product platform by maintaining our existing strong presence through our team, offices and license.”
According to Willis Towers Watson, as of 2015, the Australian pension market was the fifth largest in the world with total assets of approximately AUD2 trillion. It is one of the fastest growing pension markets, with a 10 year growth rate of 9.1 per cent, owing in part to the government’s policy of compulsory superannuation contributions.
