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Bain and Carlyle vie for Wealth Enhancement Group in $7B auction
The reported valuation implies a deal would rank among the largest disclosed US private equity purchases of a wealth management business this cycle.
Bain Capital and The Carlyle Group are the final bidders for Wealth Enhancement Group in an auction valued at about $7 billion, including debt, the Financial Times reported, citing the process. The article frames the transaction as potentially one of the largest disclosed US private equity acquisitions of a wealth management business.
The sale would equal nearly a quarter of this year’s $30.3 billion global private equity deal value in the wealth management segment, according to PitchBook data cited in the report. The auction also reflects a broader consolidation push among private equity firms targeting registered investment advisers, or RIAs.
The Financial Times report points to limits that come with that consolidation. As platforms grow larger and more valuable, fewer buyers can finance the next ownership change, and the piece notes concerns that equity values would look different if these firms pursue public listings due to higher debt levels.
On the business backdrop, the report says RIAs expanded rapidly after the financial crisis as advisers sought to move away from commission-based models and as customers shifted toward fee-based approaches. It cites Cerulli Associates data showing RIAs controlled $9.8 trillion of assets as of April, up from $6.6 trillion in 2019, and notes that the distribution network remains a key attraction for buyers as policy efforts develop around 401(k) plan investment options.