T. Rowe Price Group shares surged Thursday after the Baltimore-based asset manager announced a $1 billion deal with Goldman Sachs aimed at expanding access to private-market products for retail investors.
The agreement marks a significant step for the company, which has struggled with outflows and lagging returns in recent years.
Goldman will purchase up to $1 billion in T. Rowe Price common stock through open-market transactions, ultimately owning as much as 3.5% of the firm.
Alongside the investment, the two companies will collaborate to develop co-branded wealth and retirement funds, designed to give individuals, financial advisors, and plan sponsors greater access to alternative assets such as private equity and private credit.
Strategic partnership to expand access to alternatives
The collaboration reflects a growing push by money managers to broaden retirement investment options.
The Trump administration recently signed an executive order allowing 401(k) plans to include alternative assets, including cryptocurrencies and private-market investments.
This regulatory shift has created new opportunities for firms like T. Rowe Price and Goldman Sachs to diversify product offerings and tap into investor demand for higher-yield strategies.
The partnership will leverage Oak Hill Advisors, the $98 billion private credit firm acquired by T. Rowe four years ago, to bolster new retirement and wealth-management products.
Planned launches include target-date strategies and model portfolios designed to integrate both public and private assets.
Goldman Sachs CEO David Solomon emphasized the strategic alignment in a statement, citing “a shared legacy of success delivering results for investors.”
He noted that Goldman’s long history in both public and private markets, combined with T. Rowe’s strength in active management, will allow clients to “invest confidently in the new opportunities for retirement savings and wealth creation.”
Challenges for T. Rowe price
Despite Thursday’s rally, T. Rowe Price has faced significant challenges in recent years.
The firm has struggled to adapt to the surge in exchange-traded funds (ETFs), remaining heavily focused on traditional active management.
This has resulted in persistent outflows, with the firm recording 17 consecutive quarters of net withdrawals.
Its last quarter of net inflows was in early 2021, and the stock remains down nearly 50% from its all-time highs that same year.
As of July 31, the firm managed $1.7 trillion in assets.
Still, CEO Rob Sharps acknowledged in the company’s latest earnings call that outflows are expected to continue through the second half of 2025, though at lower levels than earlier in the year.
Even so, T. Rowe has retained a strong foothold in retirement investing, particularly as the largest US manager of active target-date products.
The Goldman partnership builds on that strength by offering expanded access to alternatives within retirement portfolios.
Industry context and future outlook
The deal also highlights broader industry trends. Active managers face intensifying pressure as mutual fund and ETF fees have declined sharply over the past three decades.
According to the Investment Company Institute, average expense ratios for equity and bond mutual funds have fallen by more than half since the mid-1990s.
In response, many firms are seeking partnerships and new revenue streams to remain competitive.
For Goldman, the stake in T. Rowe provides access to a firm with a large retirement footprint and deep client base.
For T. Rowe, the collaboration opens a pathway to offer products it would have struggled to build alone.
Sharps stressed in an interview with Barron’s that the partnership should not be interpreted as a prelude to an acquisition by Goldman.
Instead, he described the venture as a way to craft “unique solutions” for both wealth accumulators and retirees.
Shares of T. Rowe Price rose 7.02% in trading Thursday following the announcement, though the stock remains down 7% year-to-date while the S&P 500 has gained nearly 10%.
Whether the Goldman alliance can reverse T. Rowe’s longer-term challenges will depend on how successfully the firms can deliver on investor demand for alternative assets in retirement portfolios.
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