Banco Santander said in a press release that it has entered into a definitive agreement with affiliates of leading global private equity firms Warburg Pincus and General Atlantic to boost the global growth of its asset management unit, Santander Asset Management (SAM). Under the agreement, Warburg Pincus and General Atlantic will jointly hold a 50% stake in a holding company that will integrate SAM’s eleven asset management companies. The remaining 50% will be owned by Grupo Santander.
“The transaction will improve SAM’s ability to compete with the leading international independent asset managers,” the Spanish bank explained, “while leveraging Banco Santander’s deep on the ground knowledge and experience in the markets where the bank operates.”
Under the agreement, Banco Santander will distribute products managed by SAM in the countries in which the Group has a retail network. Banco Santander will benefit from the broader, enhanced range of products and services it will be able to offer its customers. In addition, SAM will expand the distribution of its products and services internationally beyond the Banco Santander branch network.
Javier Marín, CEO of Banco Santander, said: “This partnership puts Santander Asset Management at the forefront of the industry’s consolidation process. It will help Banco Santander strengthen its relationship with our banking clients with a more competitive offering to address their investment needs.”
The new company will enhance the asset management unit in the global institutional market, where there is significant growth potential. Its goal is to double assets under management in five years and to participate in the consolidation process taking place in the industry. SAM currently manages EUR 152 billion, mainly in Europe and Latin America.
The agreement with Warburg Pincus and General Atlantic values Santander’s asset management business at EUR 2.047 billion. The transaction, which is expected to be completed by the end of the year, will generate a net capital gain of EUR 700 million for Grupo Santander.
Warburg Pincus is a leading global private equity firm focused on growth investing with more than $40 billion assets under management. It is Banco Santander’s partner in Santander Consumer USA, the Group’s consumer finance unit in the U.S. General Atlantic, a leading global growth equity firm, manages over $17 billion, with investments in more than a dozen financial services companies.