Wells Fargo & Company (NYSE: WFC) has agreed to sell Wells Fargo Asset Management to private equity firms GTCR LLC and Reverence Capital Partners L.P. for $2.1 billion. The transaction is expected to close in the second half of 2021.
Wells Fargo Asset Management is an asset management firm with $603 billion in assets under management, 24 offices globally, and specialized investment teams supported by more than 450 investment professionals.
The sale includes Wells Fargo Bank N.A.’s business of acting as trustee to its collective investment trusts and all related Wells Fargo Asset Management legal entities. As part of the transaction, Wells Fargo will own a 9.9 percent equity interest and will continue to serve as an important client and distribution partner.
This transaction will establish the asset management business as a new, independent company, which will be re-branded upon closing. The new company will “operate with the singular focus of serving the needs of global institutional and wealth clients.”
Barry Sommers, chief executive officer of Wells Fargo’s wealth and investment management division, said, “…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.”
Nico Marais, Wells Fargo Asset Management’s CEO since June 2019, will remain CEO; he and his leadership team will continue to oversee the business. Joseph A. Sullivan, former chairman and CEO of Legg Mason, will be appointed as executive chairman of the board of the new company following the closing of the transaction.
Chicago-based GTCR will invest in Wells Fargo Asset Management from GTCR Fund XIII, a private equity fund raised in 2020 with $7.5 billion of limited partner capital commitments.
Reverence Capital, based in New York, will invest out of Reverence Capital Partners Opportunities Fund II, an investment pool with $1.2 billion of limited partner commitments which was raised in 2020.
Milton Berlinski, co-founder and managing partner of Reverence Capital, said, “As an independent organization, Wells Fargo Asset Management will pivot to the next phase of its growth and is positioned to expand on its solutions-based approach, multi-asset offerings, retail separately managed accounts, and customized investment products.”
Wells Fargo & Company is a financial services company with approximately $1.9 trillion in assets. The firm provides banking, investment, and mortgage products and services, as well as consumer and commercial finance, through four operating segments: consumer banking and lending; commercial banking; corporate and investment banking; and wealth and investment management.