Swiss investment bank UBS has agreed to acquire automated wealth management solutions provider Wealthfront in an all-cash transaction worth $1.4bn.
Wealthfront provides an advanced platform that provides financial planning, banking services and investment management solutions, to help clients easily manage their wealth.
The company has more than $27bn in assets under management, 470,000 clients in the US.
The transaction is expected to complete in the second half of 2022, subject to certain closing conditions including regulatory approvals.
Upon closing, Wealthfront will become a wholly-owned subsidiary of UBS, operating within the company’s UBS Global Wealth Management Americas.
Wealthfront CEO David Fortunato said: “Partnering with UBS will allow Wealthfront to offer our clients additional value-added services and best in class research that will help accelerate our vision to make growing wealth delightfully easy.
“We couldn’t be more excited to have found a strategic partner who has the same view on the power of technology as we do. We look forward to providing our service to even more millennial and Gen Z investors.”
Wealthfront is primarily focused on millennial and Gen Z investors, a client segment with significant domestic growth potential.
The millennials and the Gen Z population, with more than 130 million investors in the US alone, is expected to own an increasing share of the world’s wealth.
With the acquisition, Wealthfront and its clients can benefit from UBS’ wealth management capabilities, thought leadership, global footprint, along with products and services.
Also, the transaction would enable UBS to advance its growth strategy in the US, widen its reach among high-net-worth investors and expand its distribution and capabilities.
UBS said that Wealthfront will support its new digital offering, and expand its offerings through Wealth Advice Centre, and Workplace Wealth Solutions businesses, focused on high-net-worth clients, and corporate employees.
UBS group chief executive officer Ralph Hamers said: “Adding Wealthfront’s capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US.
“Wealthfront complements our core business in the US providing wealth management to high net worth and ultra-high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
UBS Investment Bank served as a financial advisor and Sullivan & Cromwell as legal counsel to UBS, while Qatalyst Partners served as exclusive financial advisor and Fenwick & West as legal counsel to Wealthfront on the transaction.
In a separate development, UBS has launched its new Multicultural Investors Strategic Client Segment, with investable assets worth $1m and above.
The new business unit is focused on investors from three large racial and ethnic groups, Asian-American, Black, and Hispanic and Latino, said the company.
