Wells Fargo, one of the largest banks in the United States, has announced the sale of Wells Fargo Asset Management (WFAM) to a pair of private equity firms. The purchase price GTCR and Reverence Capital Partners have agreed to is $2.1 billion, and Wells Fargo will retain 9.9% ownership.
In a statement on the deal, Barry Sommers, CEO of Wells Fargo’s Wealth & Investment Management division, said, “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.”
Refocusing on core lines of business has been the central theme at Wells Fargo since Charles Scharf took the reins in 2019. The bank has severely lagged its peers since the scandal which took place in 2016 and the Federal Reserve imposed an asset cap upon it.
However, with Wells Fargo selling off lagging units and making progress towards getting the cap lifted, the light at the end of the tunnel appears to be fast approaching.