Wells Fargo, the US-headquartered bank, has struck a deal to offload its asset management arm in a transaction worth $2.1bn.
Wells Fargo Asset Management, which oversees more than $600bn in assets, has been acquired by private equity firms GTCR and Reverence Capital. As part of the transaction, Wells Fargo will own a 9.9% equity interest and will continue to serve as a client and distribution partner to the fund management business.
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Wells Fargo Asset Management chief executive Nico Marais remain in the top job once the deal is completed during the second half of this year. Marais has overseen the asset manager since 2019, having previously led the San Francisco asset manager’s multi-asset solutions business.
Joe Sullivan, former chief executive of US asset manager Legg Mason, will become executive chair of the new company.
“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.”
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The deal is the first major change initiated at Wells Fargo by CEO Charles Scharf, the former BNY Mellon boss who was hired in 2019.
His appointment came three years after a scandal at the bank, which led to the departure of former CEO John Stumpf in 2016. Under pressure to cross sell products, Wells Fargo bank staff created as many as two million deposit and credit card accounts without customers’ knowledge.
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