American private equity firm Warburg Pincus has acquired a minority stake in the investment management firm Edelman Financial Engines.
The investment, whose details have not been revealed, values Edelman at $7.3bn. The transaction is expected to close in the second quarter of this year.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
In conjunction with the investment, Warburg managing director Michael Martin will join Edelman’s board of directors.
Edelman Financial Engines president and CEO Larry Raffone said that the new investment from Warburg, along with the continued support from the company’s majority shareholder Hellman & Friedman, shows the abundance of opportunity ahead for the business.
“Our record growth in 2020 created momentum that has continued into 2021. We are well-positioned and excited to take advantage of the opportunities in front us and to fulfill our long-term vision of helping more Americans meet all their financial goals,” Raffone added.
Martin added: “We have a strong history with Edelman Financial Engines and are thrilled by this opportunity to invest in its continued growth in partnership with Hellman & Friedman.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“We believe that the Edelman Financial Engines business model, which spans workplace retirement plan advice and traditional financial planning and investment management services, uniquely positions the firm to help millions of Americans reach their financial goals.”
Hellman & Friedman, who continues to be the majority shareholder in Edelman, acquired Financial Engines in 2018 in a $2.8bn deal.
The deal resulted in the merger of Financial Engines with Edelman Financial Services.
Commenting on the latest development, Hellman & Friedman partner Allen Thorpe said: “We look forward to partnering with Michael and the Warburg Pincus team. They bring great expertise in the financial services industry and will be a great addition to the Board as we support the Company’s bright future together.”
In May last year, Warburg said it is set to raise its holding in Singaporean real estate fund manager ARA Asset Management (ARA) to 48.7%. The firm previously had a 30.7% interest in the fund manager.
