Wilmington Trust, a leader in wealth management and corporate and institutional services and a wholly-owned subsidiary of M&T Bank Corporation, announced an agreement with Madison Dearborn Partners, LLC ("MDP"), a leading private equity firm based in Chicago, under which funds affiliated with MDP will acquire Wilmington Trust's Collective Investment Trust ("CIT") business. Upon completion of the transaction, the CIT business will become an independent company with a new brand name owned by funds affiliated with MDP.
The CIT business, part of Wilmington Trust's Institutional Client Services ("ICS") division, is an industry-leading provider of third-party trustee and administrative services to asset managers and the employer-sponsored retirement market. The business has delivered consistent year-over-year revenue growth and currently manages approximately $115 billion in CIT assets for more than 550 funds across a family of about 45 subadvisors -- including AllianceBernstein, BlackRock, Franklin Templeton, MetLife, Neuberger Berman, and Raymond James.
"The CIT portfolio has shown tremendous growth since M&T Bank acquired Wilmington Trust in 2011," said Jennifer Warren, Senior Executive Vice President and Head of ICS. "We believe this is the natural next step in the evolution of the business and will help ensure CIT services and offerings continue to develop in ways that current and future clients will require to meet their investing needs. Furthermore, this transaction will enable our remaining ICS businesses to deepen their focus on clients and further optimize their products and services as ICS continues to execute its vision to become the global leader in institutional trust services."
"The CIT business is an industry leader, well-respected, and recognized for its successful track record of innovation. This transaction will help ensure continued growth for our business, people, and clients well into the future," said Rob Barnett, Executive Vice President at Wilmington Trust, who will serve as the independent company's CEO. "MDP has extensive experience in financial services and will add significant value to our newly formed company. We are excited about this next chapter and will continue to offer our strong customer-centric services to the retirement market with the substantial resources and expertise the MDP team will bring to bear."
MDP brings a significant track record of successful investment in financial services businesses, including EVO Payments, Navacord, NFP, and The Ardonagh Group. MDP's experience with scaling and growing businesses in the financial services industry will enable Wilmington Trust's CIT business to deepen and expand its trustee and administrative services customer relationships through increased investment in product capabilities, technology solutions (including the recently launched BoardingPass platform), and strategic acquisition opportunities.
"We are thrilled to work with Wilmington Trust's leading CIT team and leverage our industry expertise to support the business's next chapter in the large and growing CIT market," said Vahe Dombalagian, Managing Director and Co-Head of MDP's Financial and Transaction Services team.
"As clients increasingly demand innovative and tailored retirement fund solutions, the Wilmington Trust CIT business will be well-positioned as an independent company to expand new and existing relationships with a focus on helping plan sponsors navigate complex retirement and regulatory challenges. We look forward to working with the Wilmington Trust CIT team to execute a growth strategy that strengthens the business's leadership position in the competitive market for third-party trustee and administrative services."
The transaction is expected to close no later than mid-2023 and is subject to customary closing conditions and regulatory approvals. Raymond James is acting as financial advisor to M&T Bank, and Debevoise & Plimpton is serving as its legal counsel. UBS Investment Bank and J.P. Morgan Securities LLC are acting as financial advisors to MDP, and Latham & Watkins LLP and Eversheds Sutherland (US) LLP are providing legal counsel.