Tuesday, March 28, 2023

UBS boosts US push with $1.4 billion Wealthfront purchase

The logo of Swiss bank UBS can be seen at the company’s office in Bahnhofstrasse in Zurich in this July 1, 2009 file photo. Reuters/Ard Wigman/Files

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  • All cash deals set to close pending approvals this year
  • The purchase expanded UBS’s US market reach.
  • Deal with Wealthfront offers more services, research

ZURICH, Jan 26 (Reuters) – Swiss bank UBS has agreed to buy U.S.-focused automated wealth management provider Wealthfront, which has more than $27 billion in assets under management, the two companies said in a statement. The cash deal was valued at $1.4 billion.

The acquisition of Wealthfront, which has more than 470,000 customers in the United States and caters well to millennial and Gen Z investors, is set to close in the second half of 2022.

“UBS will accelerate its growth ambitions in the US, expand the firm’s reach among affluent investors, and expand its distribution and capabilities,” the two companies said in a statement on Wednesday.

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Wealthfront will become a wholly owned subsidiary of UBS (UBSGS) and will operate as a business within UBS Global Wealth Management Americas.

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

Joining UBS will allow Wealthfront to offer customers additional services and research, with its CEO David Fortunato saying, “We couldn’t be more excited to find a strategic partner who shares a similar perspective on the power of technology”.

UBS said in October that it wants to build a digitally scalable mentoring model for affluent clients in the US who have up to $2 million to invest. read more

It then followed a trend by US rivals Goldman Sachs (GS.N) and Morgan Stanley (MS.N) in their quest to broaden their client base beyond the super-high-net-worth individuals they traditionally used to be. Used to serve.

UBS said it would finance the deal with additional capital.

The companies said UBS Investment Bank is acting as financial advisor to UBS and Sullivan & Cromwell is legal advisor. Catalyst Partners is Wealthfront’s financial advisor and Fenwick & West is acting as legal advisor.

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

Our Standards: Thomson Reuters Trust Principles.


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