SunTrust Banks has agreed to sell its asset management subsidiary, RidgeWorth Capital Management, to RidgeWorth, an investor group which is led by a private equity fund managed by Lightyear Capital.
The sale price consists of up to US$245 million to be paid at closing with the potential for up to US$20 million in additional proceeds based on retention of certain assets.
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SunTrust estimates the after-tax gain on the transaction to be US$50 million.
RidgeWorth and its five institutional asset management boutiques collectively manage approximately US$50.6 billion in assets.
SunTrust had US$189.4 billion in assets under advisement at September 30, 2013. As of September 30, RidgeWorth contributed approximately US$25 million to SunTrust’s year-to-date net income.
Mark Chancy, wholesale banking executive at SunTrust, said: "Lightyear Capital is an experienced partner that will help RidgeWorth build on its success in growing third-party assets, and we look forward to continuing our relationship with RidgeWorth as an independent asset management business."
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By GlobalDataChancy added that SunTrust will continue to offer various asset management solutions to help its institutional and individual clients with their investment needs.
The transaction, which is subject to various, customary closing conditions including consents of certain RidgeWorth investment advisory clients, is expected to close during the second quarter of 2014.
