WFAM has specialised investment teams operating through 24 offices worldwide, and its assets under management value $603bn
Wells Fargo in Laredo, Texas. (Credit: Billy Hathorn/Wikipedia.)
Wells Fargo has agreed to sell its Wells Fargo Asset Management (WFAM) to GTCR and Reverence Capital Partners for $2.1bn.
WFAM is an asset management firm with assets under management worth $603bn, operating through 24 offices worldwide.
The firm’s specialised investment teams are supported by more than 450 investment professionals, to provide a wide range of investment products and solutions.
The sale includes Wells Fargo Bank’s business of acting as trustee to its collective investment trusts and all associated WFAM legal entities, said the company.
Wells Fargo wealth and investment management division CEO Barry Sommers 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.”
GTCR and Reverence Capital are both private equity firms with extensive experience in investing in the asset management business.
With the transaction, the companies are expected to provide WFAM with the resources and expertise to strengthen its investment solutions.
Wells Fargo is expected to own 9.9% equity interest and continue to serve as an important client and distribution partner for WFAM.
The transaction is expected to be closed in the second half of 2021, subject to customary closing conditions.
WFAM CEO Nico Marais, along with his leadership team will continue in the same positions to oversee the business, while former Legg Mason CEO and chairman Joseph Sullivan will be appointed as executive chairman of the new company board, post-closing.
Marais said: “This transaction represents a significant milestone in the growth and evolution of our firm.
“Through this new partnership, our business will be even better positioned to execute our strategy and provide our clients with innovative products and solutions to help them reach their investment goals.”
In January this year, Wells Fargo has agreed to divest its Canadian Direct Equipment Finance business to Toronto-Dominion Bank (TD), subject to certain closing conditions.