Wells Fargo has entered into definitive agreement to sell Wells Fargo Asset Management (WFAM) to private equity firms GTCR LLC and Reverence Capital Partners.
The sale would include Wells Fargo Bank NA’s business of acting as trustee to its collective investment trusts and all related WFAM entities. WFAM had US$603 billion ($761 billion) in assets under management and would be rebranded following the deal.
Nico Marais would remain as chief executive of WFAM and Joseph Sullivan, former chief executive of Legg Mason, would be appointed as executive chair of the board of the new company.
The transaction, which had an agreed purchase price of US$2.1 billion was expected to close in the second half of 2021 and Wells Fargo would own a 9.9% equity interest.
Wells Fargo said the decision to sell the WFAM business to two private equity firms would allow the firm to focus on its core consumer and corporate client businesses.
Barry Sommers, chief executive of Wells Fargo’s wealth and 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.”
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 calibre and capabilities of the management professionals and leadership team. The organisation is poised to provide further innovation in the investment marketplace while continuing to deliver high-quality products to its clients”.