Vanguard Group lined up roughly $4 billion of debt through a private placement of bonds to pay for its purchase of Altruist, according to Bloomberg. The details of the borrowing are confidential, Bloomberg said, citing unnamed people familiar with the matter.
A Vanguard representative declined to comment, according to Bloomberg.
In a private placement, companies sell their debt straight to large buyers such as life insurance firms, according to Bloomberg. That route generally lets issuers skip the registration paperwork tied to public bond offerings, and Bloomberg described it as an option for businesses that value discretion and room to maneuver.
Vanguard has joined a group of recent borrowers in that market, where the National Football League and Chick-fil-A have also struck financings this year, according to Bloomberg.
Vanguard agreed in August to acquire Altruist, a wealth technology and custody platform that serves independent financial advisers. The transaction is subject to customary closing conditions, including regulatory approvals, and the companies said at the time that they expected it to close later this year. Altruist is expected to operate as a standalone business after the close, keeping its leadership and brand.
Vanguard first invested in Altruist in 2020. The acquisition supports an effort by Vanguard Chief Executive Salim Ramji to diversify the firm’s revenue beyond low-fee index funds by building a financial advice business. Vanguard plans to become an anchor client for parts of the Altruist platform.
“Altruist’s mission to make financial advice more accessible, more affordable, and help advisers scale their practices, that very much rhymes with what we’re trying to do here at Vanguard,” Ramji said at the time of the announcement.
Altruist competes with Charles Schwab $SCHW and Fidelity Investments in providing custodial and administrative services to independent advisers. Altruist founder and Chief Executive Jason Wenk said in a statement that Vanguard’s resources would let the company pursue its mission “with greater speed and reach.”