UBS escalates US press with $ 1.4 billion Wealthfront acquisition

The logo of the Swiss bank UBS is seen at the company’s office in Bahnhofstrasse in Zurich in this file from July 1, 2009. REUTERS / Arnd Wiegmann / Files

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  • The cash agreement will be terminated this year pending approvals
  • Purchases expand UBS ‘market reach in the United States
  • Deal allows Wealthfront to offer more services, research

ZURICH, January 26 (Reuters) – Swiss bank UBS has agreed to buy US-focused automated asset management provider Wealthfront, which has more than $ 27 billion in assets under management, in a cash deal the two companies said was worth $ 1 billion. $ 4 billion.

The acquisition of Wealthfront, which has more than 470,000 customers in the US and is aimed at wealthy Millennium and Gen Z investors, will be completed in the second half of 2022.

“UBS will accelerate its growth ambitions in the United States, expand its firm reach among wealthy investors and expand its distribution and capacity,” the two companies said in a statement on Wednesday.

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Wealthfront will be a wholly owned subsidiary of UBS (UBSG.S) and will operate as a business within UBS Global Wealth Management Americas, they added.

“Adding Wealthfront’s capabilities and customer base to our global investment ecosystem will significantly increase our ability to grow our business in the United States,” said UBS CEO Ralph Hamers.

Joining UBS will allow Wealthfront to offer customers additional services and research, said CEO David Fortunato, adding: “We could not have been more excited to have found a strategic partner who has the same view on the power of technology.”

UBS had said in October that they wanted to build a digitally scalable consulting model for wealthy clients in America who have up to $ 2 million to invest. read more

This followed a trend set by US rivals Goldman Sachs (GS.N) and Morgan Stanley (MS.N) when it came to expanding their customer bases beyond the super-high online values ​​they traditionally earned.

UBS said they would finance the deal with excess capital.

The companies said that UBS Investment Bank acts as financial advisor for UBS and Sullivan & Cromwell is legal advisor. Qatalyst Partners is Wealthfront’s financial advisor and Fenwick & West acts as legal advisor.

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Reporting by Michael Shields; Edited by Jan Harvey and Alexander Smith

Our standards: Thomson Reuters Trust Principles.

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