Key Takeaways
- • Wells Fargo Investment Institute (WFII) has agreed to sell its Global Alternative Investments (GAI) Feeder Fund Platform to iCapital Network, according to a Wells Fargo announcement issued June 18, 2020 via Business Wire.
- • The GAI platform offers brokerage and wealth management clients access to roughly 70 alternative investment vehicles spanning private equity, private debt, hedge funds, private real estate, and direct private investments, and has operated since 2006.
- • Wells Fargo is also making a strategic investment in iCapital under the terms of its latest fundraising round; transaction terms were not disclosed.
- • iCapital will hire a team of Wells Fargo employees who currently support GAI platform operations, with the team continuing to support the fund portfolio during the transition.
- • The transaction is subject to customary closing conditions and is expected to close in the second half of 2020.
Summary
Wells Fargo & Company (NYSE: WFC) announced on June 18, 2020 that its subsidiary Wells Fargo Investment Institute, Inc. (WFII) has entered into an agreement to sell its Global Alternative Investments (GAI) Feeder Fund Platform to iCapital Network. In a separate announcement, Wells Fargo said it is making a strategic investment in iCapital under the terms of the company's latest fundraising round.
The GAI Feeder Fund Platform gives brokerage and wealth management clients access to a full range of alternative solutions, including private equity, private debt, hedge funds, private real estate and direct private investments, across approximately 70 investment vehicles. According to the release, GAI has offered these options through feeder funds that invest in external funds or portfolio companies since 2006.
Darrell Cronk, president of WFII, said the partnership would allow Wells Fargo to continue offering innovative alternative investment solutions while upgrading the overall platform and launching new offerings. The company said increased adoption of alternatives led WFII to partner with iCapital for what it described as a best-in-class solution. Wells Fargo will retain its existing services, including upfront and ongoing due diligence, product selection, investment monitoring, platform management, product support and education, while iCapital's platform is expected to provide investors with enhanced technology and efficiency.
As part of the transaction, iCapital will employ a team of Wells Fargo staff who currently support GAI Feeder Fund Platform operations. That team will continue supporting the fund portfolio to ensure continuity of service. The deal is subject to customary closing conditions and is expected to close during the second half of 2020. Terms of the agreement were not disclosed.
The GAI Feeder Fund Platform gives brokerage and wealth management clients access to a full range of alternative solutions, including private equity, private debt, hedge funds, private real estate and direct private investments, across approximately 70 investment vehicles. According to the release, GAI has offered these options through feeder funds that invest in external funds or portfolio companies since 2006.
Darrell Cronk, president of WFII, said the partnership would allow Wells Fargo to continue offering innovative alternative investment solutions while upgrading the overall platform and launching new offerings. The company said increased adoption of alternatives led WFII to partner with iCapital for what it described as a best-in-class solution. Wells Fargo will retain its existing services, including upfront and ongoing due diligence, product selection, investment monitoring, platform management, product support and education, while iCapital's platform is expected to provide investors with enhanced technology and efficiency.
As part of the transaction, iCapital will employ a team of Wells Fargo staff who currently support GAI Feeder Fund Platform operations. That team will continue supporting the fund portfolio to ensure continuity of service. The deal is subject to customary closing conditions and is expected to close during the second half of 2020. Terms of the agreement were not disclosed.
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