US financial institution Wells Fargo has agreed to dump its asset administration arm to non-public fairness companies GTCR and Reverence Capital Companions for $2.1 billion because it appears to concentrate on its wealth and brokerage companies.
Following the closure of the deal, Wells Fargo will keep a 9.9% fairness curiosity within the new entity, which may also be rebranded. The transaction is anticipated to shut within the second half of this 12 months and stays topic to closing circumstances.
Wells Fargo Asset Administration (WFAM) has $603 billion in property beneath administration and 24 places of work globally.
WFAM’s present chief government, Nico Marais, who took up the position in June 2019 after two years as head of multi-asset options, will proceed to supervise the enterprise as CEO. Former chairman and chief government of wealth administration agency Legg Mason, Joseph Sullivan, may also turn into government chairman of the board upon closure of the transaction.
“Working as an unbiased agency as a portfolio firm of GTCR and Reverence Capital will present quite a few advantages to WFAM’s purchasers, workers, and strategic companions — together with Wells Fargo,” mentioned Barry Sommers, CEO of Wells Fargo’s wealth & funding administration division.
The transaction displays the financial institution’s technique to concentrate on its extra worthwhile companies, together with wealth administration and broking, beneath chief government Charles Schwarf, who has been main Wells Fargo as CEO since October 2019.
Sommers added that the deal may also enable Wells Fargo to concentrate on serving its core shopper and company purchasers.
“We’re thrilled to work with Nico and the crew at WFAM, and we now have large conviction within the calibre and capabilities of the administration professionals and management crew,” mentioned Collin Roche, managing director of GTCR.
“The organisation is poised to supply additional innovation within the funding market whereas persevering with to ship high-quality merchandise to its purchasers.”