REUTERS: Wells Fargo is in exclusive talks to sell its wealth management business, which manages more than $ 607 billion on behalf of clients, to a private equity consortium led by GTCR LLC and Reverence Capital Partners, according to the company persons familiar with the matter.
The divestiture would mark the biggest upheaval for the US bank since former Bank of New York Chairman Mellon Charles Scharf joined as CEO in 2019.
The exact negotiated price could not be determined, but Reuters previously reported that Wells Fargo was looking for more than $ 3 billion for the unit.
Talks could still end without an agreement, the sources said, asking for anonymity as the matter is confidential.
Wells Fargo declined to comment. Chicago-based GTCR and New York-based Reverence did not respond to requests for comment.
The sale of the wealth management business is one of many steps Scharf took to turn Wells Fargo around after a year-long scandal over sales practices. He has cut costs and cut noncore businesses. Earlier Thursday, Wells Fargo announced a deal to sell its Canadian direct finance business to Toronto-Dominion Bank.
Last month, Wells Fargo announced that it would sell its private student loan portfolio to a group of investors.
The bank is expected to report fourth quarter results on Friday, and Scharf is expected to present a new strategic plan for the bank.
Reverence Capital, co-founded by Goldman Sachs alum Milton Berlinski and GTCR, has been actively involved in acquisitions of asset management companies.
In 2019, Reverence bought 75 percent of Phoenix-based independent financial advisory firm Advisor Group Inc, while GTCR last year acquired a minority stake in Raleigh, CAPTRUST Financial Advisors in North Carolina, which valued the registered investment advisor at $ 1.25 billion.