T. Rowe Price Group Inc. (NASDAQ:TROW) stock rose 3% in pre-market trading Thursday after Bloomberg reported that Goldman Sachs Group Inc. (NYSE:GS) plans to acquire up to $1 billion of T. Rowe stock through a private-funds partnership.
The deal could see Goldman purchase as much as 3.5% of T. Rowe’s outstanding shares via “a series of open-market purchases,” potentially making the Wall Street bank one of the company’s five largest shareholders. This represents Goldman’s only investment in an external asset management firm.
In addition to the equity stake, the two financial institutions will work together to develop and distribute private-market investment products aimed at retirement savers and high-net-worth individuals, according to a joint statement.
The timing of the deal is strategic for T. Rowe, whose shares have fallen more than 50% from their 2021 peak. The partnership is intended to expand both firms’ capabilities in the alternative investments space, with a particular focus on making private market opportunities more accessible to retail investors.
The collaboration represents an unusual arrangement in the asset management sector, with Goldman deploying its balance sheet to take a significant stake in T. Rowe while simultaneously forming a business alliance to develop new investment products.
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