Wells Fargo to divest asset management business to GTCR and Reverence Capital for $2.1bn

Wells Fargo & Company has agreed to divest its asset management business – Wells Fargo Asset Management (WFAM) to private equity firms GTCR and Reverence Capital Partners for $2.1 billion.

As part of the deal, Wells Fargo will retain a stake of 9.9% in the asset management business and will continue to be its major client and distribution partner.

The sale includes Wells Fargo Bank’s business of acting as trustee to its collective investment trusts and all associated WFAM legal entities. The entities include Wells Fargo Funds Management, Wells Capital Management, Galliard Capital Management, Wells Fargo Asset Management (International), Wells Fargo Funds Distributor, and Wells Fargo Asset Management Luxembourg.

As of 31 December 2020, Wells Fargo Asset Management had $603 billion in assets under management.

The asset management company has 24 offices across the world. Its specialized investment teams are supported by 450 plus investment professionals.

Wells Fargo Asset Management and its investment teams offer a variety of differentiated investment products and solutions to help its diverse range of clients achieve their investment goals.

The transaction is expected to close in the second half of 2021, subject to customary closing conditions. As part of the transaction, Wells Fargo will own a 9.9% equity interest and will continue to serve as an important client and distribution partner.

Barry Sommers – CEO of Wells Fargo Wealth & Investment Management division said: “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.

“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.”

According to Wells Fargo, GTCR and Reverence Capital Partners will give the resources and expertise needed by Wells Fargo Asset Management for deepening its investment solutions.

After the closing of the deal, the new, independent firm will be rebranded.

Nico Marais, the CEO of Wells Fargo Asset Management will be retained as CEO.

Collin Roche – managing director of GTCR said: “We are thrilled to work with Nico and the team at WFAM, and we have tremendous conviction in the caliber and capabilities of the management professionals and leadership team. The organization is poised to provide further innovation in the investment marketplace while continuing to deliver high-quality products to its clients.

“The team, underpinned by its diversity, client-orientation, and collaborative culture, has delivered strong performance, and we will work to reinforce these values and sustain this performance. Along with our partners at Reverence Capital, we are committed to the long-term success of the organization.”

The deal, which is subject to customary closing conditions, is likely to be wrapped up in the latter half of this year.