GSAM Acquires Smart Beta Provider

Goldman Sachs Asset Management (GSAM) has entered into an agreement to acquire Westpeak Global Advisors, a provider of smart beta solutions.

In addition to comprehensive and fully-customizable solutions for smart beta investing, Westpeak also brings strategic alliances with global index providers and asset owners. 

GSAM announced the launch of a new Advanced Beta Strategies platform, which currently represents nearly $30 billion of assets under supervision (as of March 31, 2014). The foundation of this new platform will include the smart beta business of Westpeak along with GSAM’s S&P Global Intrinsic Value Index (GIVI) strategies, a set of tax-sensitive equity strategies, and a range of liquid alternative beta strategies. The new platform will be overseen by Armen Avanessians, head of GSAM’s quantitative business.

Smart beta uses portfolio construction that avoids the method defining traditional index strategies—weighting by market capitalization, where holdings of individual stocks are set according to their value as a proportion of the universe. The goal of smart beta strategies is to deliver a better risk-adjusted return—either through better returns than the market portfolio at a similar volatility or a lower level of volatility while earning returns comparable to the broad equity market (see “Head of the Class: Smart Beta”).

“The launch of our Advanced Beta Strategies platform, in conjunction with the acquisition of Westpeak, is critical to address the needs of our clients,” says Craig Russell, head of the institutional client business in the Americas for GSAM. “Our most sophisticated clients are interested in customized investment solutions that allow them to tailor their exposures to markets in a smart, efficient and scalable way. The combination of these Advanced Beta Strategies enhances our ability to help our clients.”

As part of the acquisition, the entire Westpeak team will join GSAM and will continue to be based in Boulder, Colorado. Subject to certain conditions, the transaction is expected to close in June 2014.