INSIDE THE DEAL

Wells Fargo sells asset management arm for $2.1bn

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Wells Fargo has agreed the sale of Wells Fargo Asset Management (WFAM) for $2.1bn to GTCR and Reverence Capital Partners. Patrick Brusnahan writes

WFAM is the asset management arm of the wider Wells Fargo group and comprises of Wells Fargo Funds Management, Wells Capital Management Incorporated, and Wells Fargo Asset Management (International).

As part of the deal, Wells Fargo will own a 9.9% equity interest and also continue as a client and distribution partner.

GTCR and Reverence Capital have stated they are “focussed on investing in the franchise” in order to continue growing the business. Currently, WFAM holds more tan $600bn in assets under management (AuM).

WFAM will continue to be led to CEO Nico Marais and other senior managers from the team. In addition, Joseph Sullivan, the former chairman and CEO of Legg Mason, will join as executive chairman following closing.

“This transaction represents a significant milestone in the growth and evolution of our firm,” said Marais. “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.”

Who is involved in the Wells Fargo Asset Management sale?

Based in Chicago and founded in 1980, GTCR seeks to partner with exceptional management leaders who have strong track records of equity value creation to identify, acquire, and build market‐leading companies in its core industry domains. GTCR will invest in WFAM from GTCR Fund XIII, a private equity fund raised in 2020 with $7.5bn of limited partner capital commitments.

New York-based and founded in 2013, Reverence Capital focuses on thematic investing in leading global, middle‐market financial services. Furthermore, it will invest out of Reverence Capital Partners Opportunities Fund II, an investment pool with $1.2bn of limited partner commitments which was raised in 2020.

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. 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 organisation.”

Milton Berlinski, co‐founder and managing Partner of Reverence Capital Partners, added: “We are very enthusiastic about this exceptional opportunity to partner with such talented investment professionals and to create an independent company that will grow over the long term and further enhance its innovative products and creative solutions for its clients. As an independent organisation, WFAM 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 customised investment products.”

The transaction is expected to close in the second half of 2021, subject to closing conditions.

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