Vestwell plans to expand its presence in the state auto-IRA and college savings markets, announcing a deal Tuesday to buy BNY Mellon’s Sumday subsidiary.
The deal would catapult Vestwell to serving as a program manager for nearly $20 billion. The acquisition would add about 800,000 participants and 17,000 small employers to its book of business, according to an announcement.
Currently, Vestwell works with Sumday as the technology provider in the state auto-IRA market, a partnership the companies entered in 2018. Sumday is in the process of taking over as administrator of Oregon’s Secure Choice program this quarter, and it's also the filling that role for the program launching in Connecticut.
“Adding Sumday under the Vestwell umbrella accelerates our mission to deliver workplace savings programs to all, while deepening our relationship with one of the most respected financial institutions in the world,” Vestwell CEO Aaron Schumm said in the announcement. “BNY Mellon has been a strong supporter of Vestwell since our early days, and we are fully aligned in helping address the savings gap felt across the country, taking the initiative to help employers and savers reach their savings goals.”
Following the acquisition, Sumday will be renamed Vestwell State Savings, the companies said. That entity, a subsidiary of Vestwell, will be led by BNY’s Douglas Magnolia as president, according to the announcement.
The firms did not disclose financial details of the transaction.
Following the transition, BNY Mellon will still provide accounting and record keeping at the custody level to the Vestwell-managed state programs, the companies said. In some cases, BNY affiliate Lockwood Advisors will also continue to provide subadvisory services.
Sumday supports nine college-savings and ABLE programs, according to its site.
Earlier this year, Vestwell completed a Series C funding round of $70 million, with Wells Fargo Strategic Capital, Fin Venture Capital, Goldman Sachs, Morgan Stanley, Manulife, Point72 Ventures among those contributing. That followed prior funding rounds of $42 million.
In July, the company had 140 employees, about three times the number it had 18 months earlier, Schumm said at the time. The company has been hiring for numerous positions, primarily in product and engineering, he said.
Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.
Reshuffle provides strong indication of where the regulator's priorities now lie.
Goldman Sachs Asset Management report reveals sharpened focus on annuities.
Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.
Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.
How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave