Deal makes Chicago firm tops among turnkey asset management shops.
Envestnet Inc. has acquired Prudential Financial Inc's Wealth Management Solutions unit in a $30 million-plus deal to continue building its wealth management platform.
The turnkey technology provider today announced a deal to pay $10 million in cash once the deal closes, plus a contingent consideration of up to $23 million in cash to be paid over the course of three years. The transaction is expected to wrap up by the early third quarter.
With $22 billion in assets under administration — largely from institutional clients — Prudential's Wealth Management Solutions unit was only a small part of the overall operation, according to Prudential spokeswoman Theresa Miller.
“We're really just pleased to have been able to find a buyer who can support the growth of the business,” she said. “Envestnet's products and capabilities already complement those of WMS.” The deal will “allow the business to expand, and given the size of the business at Prudential, it wouldn't have happened here,” she added.
WMS employs about 90 people, many of whom are expected to move over to Envestnet, Ms. Miller said.
The acquisition “solidifies our presence in the bank channel,” said Jud Bergman, chairman and chief executive officer of Envestnet. “We don’t have a lot of presence in the bank trust and private asset management business. That’s where Prudential WMS has been successful.”
Despite WMS' size relative to Prudential, the deal is a significant one for Envestnet: It will make the firm the No. 1 turnkey asset management platform, with $139 billion in TAMP assets as of the end of last year, according to Cerulli Associates Inc. It will also put the firm at the top of the list in terms of service providers by total assets, with $392 billion as of the end of last year, according to Money Management International.
Envestnet has been busy on the acquisition side: Last year, the firm bought up portfolio management tech provider Tamarac Inc. in a $54 million deal and Prima Capital Holdings Inc., a provider of research tools for institutional investors and banks, for about $13.75 million in cash.
