Wells Fargo Is Weighing a Sale of Its Asset Management Business

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Just weeks after

Morgan Stanley

agreed to buy

Eaton Vance,

Wells Fargo

is weighing the sale of its asset management business, two people familiar with the situation said.

Bids for Wells Fargo Asset Management are due next week, these people said. Wells Fargo (ticker: WFC) is seeking a buyer for the whole unit, which is expected to sell for $3 billion, they said. Wells Fargo declined to comment.

Wells Fargo Asset Management had $607 billion in assets under management, according to the bank’s third-quarter earnings report last week. The unit produces $1 billion in revenue on $300 million earnings before income, taxes, depreciation, and amortization, or Ebitda, one of the people said.

A sale would be part of Wells Fargo CEO Charlie Scharf’s plans to turn around the lender, which had been dragged down by a sales practices scandal. The bank has also seen an exodus of financial advisors over the past few years. Shares of Wells Fargo have dropped 57{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} in the past year. On Friday, the stock was up slightly, at $23.33.

Wells Fargo Asset Management won’t be an easy sell, the people familiar with the matter said. The unit is a mix of different businesses, including Analytic Investors, ECM Asset Management, Galliard Capital Management, and Golden Capital Management.

In 2018, Wells Fargo sold its majority stake in RockCreek Group, a registered investment advisor, back to its founder and CEO. About half of Wells Fargo Asset Management is fixed income while the rest is equity, one of the people familiar with the matter said.

Wells Fargo also wants a buyer for the whole business, which makes an acquisition difficult. Most potential acquirers will likely want different parts of Wells Fargo AM and not the whole unit.

A handful of traditional large asset managers have already passed on the unit, the people said. Wells is also reaching out to private-equity firms, media reports said.

The sale comes just weeks since Morgan Stanley (MS) announced it was buying Eaton Vance (EV) for $7 billion. The sale was expected to set off a wave of consolidation in the space. Société Général has reportedly put Lyxor, Europe’s third largest ETF provider, up for sale, according to Reuters.

JPMorgan Chase

(JPM) is also said to be considering buying

Waddell & Reed

(WDR), which caused Waddell’s stock to jump 6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} earlier this month.

Reuters reported the news of the Wells Fargo asset management sale late Thursday.

Write to Luisa Beltran at [email protected]