Wilmington Trust, a wholly-owned subsidiary of M&T Bank, agreed to sell its Collective Investment Trust (CIT) business to Madison Dearborn Partners (MDP), a private equity firm based in Chicago. The CIT business will become an independent company with a new brand name, owned by funds affiliated with MDP.
The CIT business, part of Wilmington Trust’s Institutional Client Services (ICS) division, is a provider of third-party trustee and administrative services to asset managers and the employer-sponsored retirement market.
“The CIT portfolio has shown tremendous growth since M&T Bank acquired Wilmington Trust in 2011,” Jennifer Warren, senior executive vice president and head of ICS at Wilmington Trust, said. “We believe this is the natural next step in the evolution of the business and will help ensure CIT services and offerings continue to develop in ways that current and future clients will require to meet their investing needs. Furthermore, this transaction will enable our remaining ICS businesses to deepen their focus on clients and further optimize their products and services as ICS continues to execute its vision to become the global leader in institutional trust services.”
“The CIT business is an industry leader, well-respected and recognized for its successful track record of innovation. This transaction will help ensure continued growth for our business, people, and clients well into the future,” Rob Barnett, executive vice president at Wilmington Trust, said. “MDP has extensive experience in financial services and will add significant value to our newly formed company. We are excited about this next chapter and will continue to offer our strong customer-centric services to the retirement market with the substantial resources and expertise the MDP team will bring to bear.”
MDP brings a track record of successful investment in financial services businesses, including EVO Payments, Navacord, NFP and The Ardonagh Group. This will enable Wilmington Trust’s CIT business to deepen and expand its trustee and administrative services customer relationships.
“We are thrilled to work with Wilmington Trust’s leading CIT team and leverage our industry expertise to support the business’s next chapter in the large and growing CIT market,” Vahe Dombalagian, managing director and co-head of financial and transaction services team at MDP, said. “As clients increasingly demand innovative and tailored retirement fund solutions, the Wilmington Trust CIT business will be well-positioned as an independent company to expand new and existing relationships with a focus on helping plan sponsors navigate complex retirement and regulatory challenges. We look forward to working with the Wilmington Trust CIT team to execute a growth strategy that strengthens the business’s leadership position in the competitive market for third-party trustee and administrative services.”
The transaction is expected to close no later than mid-2023. Raymond James is acting as financial advisor to M&T Bank and Debevoise & Plimpton is serving as its legal counsel. UBS Investment Bank and J.P. Morgan Securities are acting as financial advisors to MDP and Latham & Watkins LLP and Eversheds Sutherland LLP are providing legal counsel.