Wells Fargo & Company today announced that it has entered into a definitive agreement to sell Wells Fargo Asset Management (WFAM) to private equity firms GTCR and Reverence Capital Partners, L.P. for $2.1 billion.

The transaction, which includes Wells Fargo Bank N.A.’s business of acting as trustee to its collective investment trusts and all related Wells Fargo Asset Management legal entities, is expected to close in the second half of 2021, subject to customary closing conditions, according to a news release.

As part of the transaction, Wells Fargo will retain a 9.9% equity interest and will continue to serve as an important client and distribution partner, the release said. The new, independent company will be rebranded at the close of the transaction.

Reverence Capital already is a major player in the advisory space. In 2018 it acquired a controlling interest in Advisor Group for about $2.3 billion. Then in 2019 Advisor Group  purchased the Ladenburg Thalmann broker-dealer network for about $1.3 billion and Reverence merged the two entities.

“This transaction represents a significant milestone in the growth and evolution of our firm,” Nico Marais, WFAM’s CEO said in a statement. “Through this new partnership, our business will be even better positioned to execute our strategy and provide our clients with innovative products and solutions to help them reach their investment goals.”

Marais, who has been CEO since June 2019, will remain in that position, the release said, noting that he and his leadership team will continue to oversee the business. It also noted that Joseph A. Sullivan, former chairman and CEO of Legg Mason, will be appointed as executive chairman of the board of the new company following the closing of the transaction.

“We are thrilled to work with Nico and the team at WFAM, and we have tremendous conviction in the caliber and capabilities of the management professionals and leadership team," Collin Roche, managing director of GTCR, said. “The organization is poised to provide further innovation in the investment marketplace while continuing to deliver high-quality products to its clients. Along with our partners at Reverence Capital, we are committed to the long-term success of the organization.”

Milton Berlinski, co-founder and managing partner of Reverence Capital, said the new company will grow over the long term and further enhance its innovative products and creative solutions for its clients. “As an independent organization, WFAM will pivot to the next phase of its growth and is positioned to expand on its solutions-based approach, multi-asset offerings, retail separately managed accounts, and customized investment products,” he said.

WFAM has $603 billion in assets under management, 24 offices globally and specialized teams supported by more than 450 investment professionals. The asset manager and its investment teams provide a broad range of differentiated investment products and solutions to help its diverse range of clients meet their investment objectives., the release noted.

Operating as a portfolio company of GTCR and Reverence Capital will provide numerous benefits to WFAM’s clients, employees, and strategic partners, including Wells Fargo, said Barry Sommers, CEO of Wells Fargo’s Wealth & Investment Management division. “At the same time, 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,” he said.

Wells Fargo Asset Management (WFAM) includes Wells Fargo Funds Management, LLC; Wells Capital Management Inc.; Galliard Capital Management, Inc.; Wells Fargo Asset Management (International) Ltd.; Wells Fargo Asset Management Luxembourg S.A.; and Wells Fargo Funds Distributor, LLC.