In this conversational video, Anthony Cheung and guest Eddie dissect Goldman Sachs' recent €1.6 billion acquisition of NN Group’s investment‑management arm, a Dutch insurer’s asset‑management business with €355 billion AUM. They place the deal within a broader wave of consolidation among investment banks, citing similar moves by Morgan Stanley, JPMorgan, and others. Eddie outlines the strategic rationales: scaling European asset‑management presence, diversifying away from volatile trading and traditional investment‑banking fees, tapping ESG demand, acquiring fintech capabilities, and gaining exposure to retail‑trading and passive‑investment growth. He also notes macro pressures such as low‑interest‑rate environments and tighter net‑interest margins. Anthony then pivots to practical advice for students preparing for interviews, urging them to understand these trends, the motivations behind deals, and how banks are reshaping their business models. The segment concludes with a plug for the upcoming AmplifyMe platform launch, positioned as a resource for career‑focused viewers.
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Okay, hi guys, it's Anthony and Eddie here. And as promised in a recent video yesterday, we are going to do some new content and this is looking at M&A transactions. And I mentioned this because Eddie did a really great post on LinkedIn earlier today talking about an FT story about Goldman's purchasing a Dutch insurer's investment management arm for €1.6 billion. So Eddie, what's going on with Goldman's in that deal?
Yeah, Goldman's along with all the other investment banks have been really active. This year and also last year, and they've continued to gobble up different asset management and wealth management firms and arms. And this is really in the latest wave of kind of asset management consolidation and kind of financial institution consolidation. So they've basically agreed a deal with— to buy NN Group, which is a kind of asset management arm of a Dutch insurance company, for €1.6 billion. Um, and they have $355 billion in assets under management. And basically the rationale behind this deal is that it significantly expands Goldman's European asset management presence. Um, and what's really interesting about this is if we look at other kind of deals that have taken place, uh, let's say Morgan Stanley acquiring Eaton Vance and E-Trade last year, JP Morgan have been super active this year They've acquired firms like OpenInvest and Nutmeg as well for about $700 million. So there's a lot of activity right now in the kind of investment banking and asset management space.
So, so what, what does all that kind of mean going forward? Like, so if you're a student perhaps and you've got interviews coming up, what's the main things to just keep an eye on as a trend in this?
Yeah, definitely. So The first thing is being aware of these deals, of course, taking place, and then really asking and looking at those deals and thinking, okay, why are they making these acquisitions and these transactions? So we can break it down as a kind of more macro trend for all these investment banks that are looking to acquire firms like OpenInvest and Nutmeg and E-Trade. Why are they doing this? Okay, so let's take a look at a few of the kind of rationales behind these deals. So for example, Goldman and NN Group, it's really about scaling their asset management platforms to really diversify away from the more traditional investment banking fees, like trading, like investment banking in the sense of M&A, ECM, and DCM transactions. So like you saw from the recent kind of investment banking results that come out, there was a big miss for pretty much all the investment banks in something called FICC trading, Okay, so again, it depends on market conditions, depends on the performance of the traders. Um, so that can take a big— it can provide a big hit to the earnings if they miss on something like this. So acquiring all of these different asset management arms, and kind of inherently in the asset management and wealth management space, the fees are generally more stable and very, very lucrative. So they're looking to kind of diversify away from just those particularly— could be potentially volatile, uh, income streams. Um, other kind of big macro trends at the moment is ESG, so gaining exposure to ESG to satisfy the growing client demand for these kind of environmentally, social, and government-friendly companies. So for example, JP Morgan acquiring OpenInvest— this allows customers to customize their portfolios based on ESG metrics, so companies that satisfy XYZ in terms of the ESG checklist. Other massive trends, as we know, fintechs increasingly prevalent. If you look at firms like Revolut achieving massive valuations, they're really the big disruptors in this kind of banking financial institution space. So firms like JP Morgan and Goldman Sachs are looking to acquire these fintechs to support their digital transformation in terms of providing kind of things like digital wallets and things like that. It's also quite a nuancing, and in the sense of they're also trying to avoid acquisitions with their bigger kind of banking rivals, because of course that would come under a lot of regulatory scrutiny. And by acquiring these kind of smaller, faster-growing fintechs, it can bypass some of the regulatory deposit caps. So that's why they're kind of doing that. Again, we've— over the last kind of 2020 and 2021 that we've covered a lot on this channel, the retail trading boom, if it's options, if it's kind of crypto E-Trade was a massive winner in that kind of 2020 period and then was acquired by Morgan Stanley. So again, getting exposure to that boom in retail trading activity, that acquisition by Morgan Stanley looks fantastic right now. And of course, the big elephants in the room, your BlackRocks, your Vanguards, the big passive investment behemoths, these investment banks are looking at these guys and thinking, wow, I want a piece of that action. So they're trying to compete with those passive investment streams and that industry is, you know, it's growing massively, you know, has been and is continuing to grow. Uh, the private capital industry as well, that we can cover in another video, is growing massively. So these investment banks are looking to take a— get a piece of these really growing, uh, kind of, uh, areas. And again, you know, in terms of the macro framework, interest rates are record lows, monetary policy is extremely loose. So there's immense pressure on the net interest margins of these traditional banks. So they're not making a lot of money from borrowing from the central banks and lending out to all these corporations at the moment. So they're looking really to get exposure through things like ESG, retail deposits like Marcus, and asset management flows.
Cool. Oh, yeah. I'll let you take a breath there, Eddie. But there's a lot of great context there. And I think for sure, if you're a student watching this, that's what will make the difference when you're engaging in interaction with someone in an interview situation, applications. I know there's a lot of people going through that now, so definitely feel free to drop Eddie a comment if there's questions or anything he's covered. If you need links to any of these deals and things like that, I'm sure he could provide color. And also we'll drop that registration link again for the new AmplifyMe platform launch coming out on the 15th of September. And so again, we'll be covering tons more stuff like this and other kind of great variety of different content. So any suggestions as well, let us know. And yeah, we'll see you for the next video. Thanks, Eddie.
