Wells Fargo promoting asset administration enterprise to GTCR, Reverence Capital Companions

Scharf, who took over the helm in late 2019, has given Wells Fargo’s operations an in-depth look and stated earlier this year that divestments would help improve the company’s focus. He listed Asset Management, Corporate Trust and Rail Leasing as units on the chopping block.

“This transaction reflects Wells Fargo’s strategy of focusing on companies that serve our core consumer and corporate customers and allows us to focus even more on growing our wealth and brokerage businesses,” said Barry Sommers, CEO of Wells Fargo’s wealth and investment management division, said in the statement.

Wells Fargo struggled under an asset cap imposed by the Federal Reserve in 2018 to punish the lender for a range of corporate governance and risk management mistakes. As one of the first signs of escape from punishment, the company secured acceptance of a Fed proposal to overhaul operations in September.

Among other things, the bank agreed in December to sell its $ 10 billion private student loan book to a group that includes Apollo Global Management Inc. and Blackstone Group Inc.

Not everything is for sale. San Francisco-based Wells Fargo decided to keep its private label credit card unit after reaching out to prospective buyers last year, a knowledgeable person said earlier this month.

The asset management deal, which is expected to close in the second half of 2021, will leave Wells Fargo with a 9.9% stake in the company. Nico Marais, who has headed Wells Fargo Asset Management since 2019, will continue to oversee the business, according to the statement.

Asset management has seen a wave of consolidation in recent years, with large banks either expanding their businesses in search of efficiency or selling them to growth-oriented competitors. The sector is responding to pressure on fees due to cutthroat competition and a shift to passive fund management and high technology and compliance costs.

Wells Fargo is a medium-sized player in wealth management among the major US banks. Morgan Stanley agreed to Eaton Vance Corp. last year. for $ 7 billion. Along with JPMorgan Chase & Co. and Goldman Sachs Group Inc. Citigroup Inc. and Bank of America, the company is one of the companies with assets under management of at least 1 trillion US dollars Corp. don’t have a huge presence in business.

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