Wells Fargo & Co is reportedly about to sell its asset management business, that manages funds of over $607 billion to a general private equity consortium led by Reverence Capital Partners LP and GTCR LLC .
This would be the biggest shake-up for the firm to date since Charles Scharf, former Chief Executive of the Bank of New York Mellon, joined as CEO in 2019. The exact deal price being negotiated has not been disclosed, but previous data says that the company was expecting a deal of more than $3 billion for the business.
There are chances that even after long talks the acquisition may end without a deal, sources have revealed, requesting anonymity as the matter is highly confidential.
On this matter, Wells Fargo has declined to comment, while GTCR and New York-based company Reverence also did not react to requests for comment.
The asset management business divestment is one of the important steps taken by Scharf to turn things around for Wells Fargo, following an old sales practices scandal. He has also been shedding non-core businesses along with cutting costs. Wells Fargo has earlier declared a deal to sell its direct equipment finance business to Toronto-Dominion Bank as well.
Speaking on which, Wells Fargo said last month that it would sell its student loan portfolio to a well-known group of investors.
The financial services giant is scheduled to report last quarter earnings on Friday, and Scharf is about to unveil a new plan for the bank.
Interestingly, GTCR and Milton Berlinski, alum of Goldman Sachs and co-founder of Reverence Capital have been active in acquisitions in the asset management sector.
Data of 2019 reportedly reveals that Reverence bought a 75% stake in advisory firm Advisor Group Inc. On the other hand, last year GTCR reportedly took a small stake in CAPTRUST Financial Advisors, Raleigh North Carolina.