Goldman Sachs Asset Management (GSAM) has decided not to absorb almost a third of the staff of Shell Asset Management Company (SAMCo), according to sources close to the deal between the two firms.
Last month, IPE reported that GSAM had agreed to hire a number of SAMCo workers as part of the agreement to take over the fiduciary management of six Shell pension funds. SAMCo is a full subsidiary of Shell.
The very fact that GSAM had the intention to hire a large number of SAMCo workers as part of the deal was cited at the time as an important reason for the US asset manager to have won the mandate.
Other asset managers that competed for the bid had declined to make such a commitment.
Originally, 42 of the asset manager’s 160 employees would transfer to GSAM. According to a source close to SAMCo, GSAM had already anticipated this by adapting its organisation accordingly, which GSAM declined to confirm.
Redundancy scheme
According to a source close to SAMCo, GSAM had received a list of SAMCo employees from Shell, from which the asset manager could pick and choose the employees it wanted to hire.
The SAMCo employees who were to switch to GSAM would not have to make use of the generous redundancy scheme that Shell had drawn up for SAMCo employees. This could potentially save Shell millions of euros in redundancy pay.
However, many of the SAMCo employees originally chosen by GSAM turned out to prefer a lump sum payment – or at least certain long-term job guarantees from GSAM.
According to a source close to the original deal between Shell and GSAM, some SAMCo employees could still join the US asset manager, which, like SAMCo, has an office in The Hague.
“With every transaction we do, we take into account the needs of asset owners and identify key staff to retain, in order for us to have the right people and means at our disposal to serve our pension fund clients after the transition,” a GSAM spokesperson said.
Dick Macrander of recruitment agency Macrander Search & Advisory thinks the latter to have been the bottleneck.
He told IPE: “I think that the SAMCo employees in question expected certain guarantees from GSAM, so that after the integration of SAMCo, they would not be fired after having missed out on their redundancy fee. It seems that GSAM did not want to give these guarantees.”
A spokesperson for Shell said the company is in talks with the SAMCo works council about “what the new situation means for the employees”. The core of the agreement between Shell and GSAM, the asset management of six Shell pension funds, will not change.
BlackRock
SAMCo was founded in late 2005, with the aim of centralising the asset management of around 200 small Shell pension funds around the globe. SAMco’s future had already come under pressure after Shell’s closed Dutch defined benefit scheme – the firm’s largest pension fund with €27bn in total assets – switched to BlackRock for fiduciary management in September 2024.
Shell’s other Dutch pension fund, which runs a defined contribution (DC) arrangement, moved to Achmea Investment Management for fiduciary services many years ago.
Read the digital edition of IPE’s latest magazine
No comments yet