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February 23, 2021 at 08:54 AM
What You Need to Know
- The business includes some $603 billion in assets and 450 investment professionals.
- The transaction is expected to close in the second half of 2021, when the new company will be rebranded.
- As part of the deal, Wells Fargo will own a 9.9% equity interest and will continue to serve as a client and distribution partner.
Wells Fargo is selling its Asset Management unit, which includes some $603 billion in assets and 450 investment professionals, to private equity firms GTCR and Reverence Capital Partners for $2.1 billion.
The transaction is expected to close in the second half of 2021, when the new company will be rebranded. As part of the deal, Wells Fargo will own a 9.9% equity interest and will continue to serve as a client and distribution partner.
The news comes about five weeks after Reuters reported that the deal was in the works. It also follows news last week that the bank had secured the Federal Reserve’s acceptance of a proposal it submitted in September to address lapses in governance and risk management, as required by a 2018 enforcement action.
“Operating as an independent firm as a portfolio company of GTCR and Reverence Capital will provide numerous benefits to WFAM’s clients, employees, and strategic partners — including Wells Fargo,” said Barry Sommers, CEO of Wells Fargo’s Wealth & Investment Management division, in a statement.
“At the same time, this transaction reflects Wells Fargo’s strategy to focus on businesses that serve our core consumer and corporate clients, and will allow us to focus even more on growing our wealth and brokerage businesses,” Sommers explained.
