Wells Fargo entered into a definitive agreement to sell Wells Fargo Asset Management to GTCR and Reverence Capital Partners for $2.1 billion. The sale includes Wells Fargo’s business of acting as trustee to its collective investment trusts and all related Wells Fargo Asset Management legal entities.
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 in Wells Fargo Asset Management and will continue to serve as a client and distribution partner.
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.
“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,” Barry Sommers, CEO of Wells Fargo’s wealth and investment management division, said.
GTCR and Reverence Capital are two private equity firms with experience investing in the asset management space. Upon closing of the transaction, the new, independent company will be rebranded.
Nico Marais, CEO of Wells Fargo Asset Management since June 2019, will remain CEO. Joseph A. Sullivan, former chairman and CEO of Legg Mason, will be appointed executive chairman of the board of the new company following the closing of the transaction.
“This transaction represents a significant milestone in the growth and evolution of our firm,” Marais said. “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.”
“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,” Collin Roche, managing director of GTCR, said.
“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 organization, 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 customized investment products,” Milton Berlinski, co-founder and managing partner of Reverence Capital, said.
Wells Fargo Securities served as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom served as legal counsel to Wells Fargo in connection with the transaction.