As part of its growth plan, Wells Fargo is reportedly seeking to double the size of its asset-management unit to $1 trillion over the next decade through acquisitions and aggressive sales to big investors.
The bank is also planning to boost its international sales force and seeking to buy smaller asset managers to expand its product offerings, the Wall Street Journal reported citing the executives carrying out the plan.
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Wells Fargo has reported total revenue of US$21.1 billion in the second quarter, down 1% from the same period of last year.
The move comes as investors are shrinking away from traditional mutual funds and moving toward passively managed products like index funds and exchange-traded funds.
According to Morningstar, the bank has recorded $1.6 billion of net outflows across its mutual funds in 2013 and $1 billion this year through July.
As part of the growth plan known as the company’s Big Hairy Audacious Goal, Wells Fargo has transformed the type of clients it handles, increasing the number of larger investors such as pension funds and also filed for regulatory approval with the Securities and Exchange Commission in June to launch an ETF.
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By GlobalDataKarla Rabusch, president of Wells Fargo Advantage Funds said the firm is still deciding how it might expand into ETFs. It expects to launch 10 to 15 more ETF’s in the next 18 months.
Mike Niedermeyer, chief executive of Wells Fargo Asset Management said that the firm is seeking for smaller acquisitions to fill in product gaps at the company, including in international and global equities.
Currently, the firm’s asset-management unit includes 28% of its assets in traditional mutual funds, 22% in money-market funds and 50% in separate accounts for institutional investors.
The group’s executives said they are also planning to boost the firm’s international platform by investing in liquid alternative funds, mutual funds that employ hedge-fund-like strategies.
