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July 18, 2024
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Private Equity

Envestnet Nears Sale to Private-Equity Shop Bain Capital


Wealth management technology company

Envestnet

is nearing a deal to sell itself to private-equity firm Bain Capital, according to a person familiar with the matter.

A spokesman for Envestnet declined to comment, saying the company “does not comment on rumors or speculation in the market.” The news of a potential sale to Bain was previously reported by Reuters Monday afternoon. 

A deal is likely to be struck by the end of the week, the person familiar with the situation said, although it’s possible talks could falter.

Shares of Envestnet slipped 1.3% on Tuesday. The stock struggled in 2023, but has increased 26% this year. That compares with 17% gain for the S&P 500.

Envestnet provides software and other services to wealth management companies, including a large turnkey-asset-management-program, or TAMP. The 25-year-old company says it serves more than 109,000 advisors overseeing more than $6 trillion in assets. Envestnet has said that the investments that it has made in its technology and platform have given it scale few rivals can match. 

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It recently has been undergoing executive and board changes. For instance, Envestnet co-founder and CEO Bill Crager stepped down on March 31; he continues to serve as a senior advisor at the company. Envestnet Chairman James L. Fox would serve as interim CEO.

And in March 2023 Envestnet added three new board members as part of an effort to end a challenge from activist investor Impactive Capital.

If Bain makes a deal for Envestnet, it won’t be the investor’s first foray into the wealth management sector. Last year, Bain and a consortium of investors bought a minority stake in the U.S. wealth management business of

CI Financial
,

a Canadian asset and wealth management company. And in 2021, Bain bought a stake in Carson Group, one of the largest registered investment advisors in the nation. 

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A Bain spokesman declined to comment.

Write to Andrew Welsch at andrew.welsch@barrons.com



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