The financial services company has potentially agreed to sell its asset management business to two private equity firms, Reverence Capital Partners and GTCR LLC
California-based multinational financial services company- Wells Fargo and Co. has reportedly announced its plans of selling its asset management business to private equity firms Reverence Capital Partners and GTCR LLC for a potential transaction deal of USD 2.1 billion.
Reports have it that the asset-management deal is estimated to reach the closure terms by the second half of 2021 and would leave Wells Fargo with a 9.9% equity interest in the operation.
It has been speculated that this decision forms a part of Charlie Scharf’s (CEO of Wells Fargo) efforts to dump non-essential operations and support the bank to come out from three years of scandal. Moreover, Scharf has conducted deep analysis of the company’s business and has thereby mentioned that divestitures would help enhance its focus in the upcoming years.
In addition to this, the financial services firm in December last year had agreed to sell its USD 10 billion private student-loan business to a group including Blackstone Group Inc., and Apollo Global Management Inc., while looking forward to exploring trading its corporate-trust businesses.
Speaking on the move, CEO of Wells Fargo’s wealth and investment management division, Barry Sommers mentioned that the transaction depicts the company’s strategy to emphasize on businesses that serve its core consumer and corporate clients. Besides, it is also likely to allow them to focus more on the company’s expanding brokerage and wealth businesses.
However, not everything for the company falls under the divestiture block. According to the official sources, Wells Fargo has decided to withhold its proprietary-label credit-card unit after reaching out to some of the potential buyers the previous year.