A press release, "Wells Fargo Enters Agreement with GTCR and Reverence Capital Partners to Sell Wells Fargo Asset Management," tells us, "Wells Fargo & Company (WFC) today announced that it has entered into a definitive agreement to sell Wells Fargo Asset Management to GTCR LLC and Reverence Capital Partners, L.P. This sale includes Wells Fargo Bank N.A.'s business of acting as trustee to its collective investment trusts and all related WFAM legal entities. Under the terms of the agreement, the purchase price is $2.1 billion. 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 and will continue to serve as an important client and distribution partner."
It explains, "WFAM is a leading asset management firm with $603 billion in assets under management, 24 offices globally, and specialized investment teams supported by more than 450 investment professionals. WFAM and its investment teams provide a broad range of differentiated investment products and solutions to help its diverse range of clients meet their investment objectives."
Barry Sommers, CEO of Wells Fargo's Wealth & Investment Management division comments, "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."
The release continues, "GTCR and Reverence Capital are two respected private equity firms with deep experience investing in the asset management space. The two firms have successful track records of growing wealth and asset management businesses for the long term and will provide WFAM with the resources and expertise to deepen its innovative investment solutions. Upon closing of the transaction, the new, independent company will be rebranded."
Wells' release adds, "Nico Marais, WFAM's CEO since June 2019, will remain CEO; he and his leadership team will continue to oversee the business. Joseph A. Sullivan, former chairman and CEO of Legg Mason, will be appointed as executive chairman of the board of the new company following the closing of the transaction."
Marais states, "This transaction represents a significant milestone in the growth and evolution of our firm.... 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."
Wells Fargo Asset Management is currently the 9th largest manager of money market funds with $202.8 billion (as of 1/31/21), according to Crane Data. Among the 27 Wells Fargo MMFs tracked, the largest include: Wells Fargo Govt MM Sel (WFFXX, $95.2B); Wells Fargo Govt MM Inst (GVIXX, $42.9B); Wells Fargo Trs Plus In (PISXX, $15.9B); Wells Fargo 100% Treas MM Inst (WOTXX, $12.3B); Wells Fargo Heritage Sel (WFJXX, $8.5B); Wells Fargo 100% Treas MM Svc (NWTXX, $5.2B); Wells Fargo Govt MM Adm (WGAXX; $4.5B); Wells Fargo MMF Prm (WMPXX; $4.5B); Wells Fargo Trs Plus Sel (WTLXX; $3.1B); and, Wells Fargo Govt MM Svc (NWGXX, $1.9B).
For more on money fund manager transactions, see these Crane Data News pieces: "Franklin, Legg Mason Deal Signals More Consolidation; More Liquidations" (2/20/20); "Sweeps Big Part of Morgan Stanley, E*Trade Purchase; Rates Flat Again" (2/25/20); "Oppenheimer Funds Now Invesco Oppenheimer; Dreyfus Keeping Name" (6/3/19); Invesco Buying OppenheimerFunds; DWS ESG, Northern's RAVI Advertise" (10/22/18); "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever" (11/3/15); and "Merged BlackRock, BGI Form World's 3rd Largest Money Fund Manager" (12/2/09).
In other news, yesterday we featured the article, "JP Morgan Launches 'Empower' Share Class to Support Minority Banks and we included a listing of all "ESG" and "Social" money market funds. But readers informed us that Morgan Stanley also recently entered the "social" space. A Prospectus Supplement for the $9.9 billion Morgan Stanley Institutional Liquidity Funds Government Securities Portfolio (MUIXX) tells us, "The Adviser will generally seek to place purchase orders for the Fund with broker-dealers that are owned by minorities, women, disabled persons, veterans and members of other recognized diversity and inclusion groups and will place the majority of the aggregate dollar volume of the Fund's purchase orders for government agency securities obtained via auction or window through such broker-dealers, subject in each case to the Adviser's duty to seek best execution for the Fund's orders."
The Investment Company Institute (ICI) also recently published a few pieces related to ESG and diversity. These include: "New ICI and IDC Survey Results Provide Benchmark for Improving Diversity and Inclusion in Asset Management Industry" and "ICI Joins Financial Services Trade Associations in Supporting Sustainable Finance Principles."
