Envestnet to Acquire TAMP FundQuest for $24 Million

Envestnet will use cash to acquire BNP Paribas' U.S. TAMP provider

Envestnet rings the bell to mark its July 29, 2010 IPO. Envestnet rings the bell to mark its July 29, 2010 IPO.

Envestnet, which began its corporate life as a turnkey asset management provider, announced Friday an agreement to acquire FundQuest Inc., a TAMP with $15 billion in AUM and administration, for $24.4 million in cash. The cash deal is expected to close in the fourth quarter of 2011.

FundQuest is the U.S. TAMP provider of French-based multinational bank BNP Paribas, and is part of BNP Paribas Investment Partners. FundQuest’s non-U.S. operations are not affected by the acquisition.

In an interview for the June 2011 cover story of Investment Advisor, Envestnet (ENV) cofounder and Chairman Jud Bergman (left) disclosed that Envestnet planned to do “one or two” acquisitions in the coming year that would accelerate its planned 20% annual organic growth.

Those “selected” deals, he said, would be either financially accretive and provide access to more advisors in the channels Envestnet already served, or be strategic acquisitions of application providers that add to or enhance functions on the Envestnet platform. Bergman characterized those types of acquisitions as “value accretive.”

In February 2010, the two companies signed a Platform Services Agreement under which FundQuest’s 180 advisory firm clients gained access to Envestnet’s wealth management platform. According to Envestnet’s August 5 announcement, the acquisition will “enable the combined firm to build upon this platform and offer more efficient and integrated wealth management solutions.”

Once the deal is closed, that agreement will be terminated, and some $6 billion in FundQuest assets will be reclassified as AUM for Envestnet.

Envestnet went public on July 29, 2010 and acquired B-Ready Outsourcing in June 2010.

Envestnet|PMC's Mike Henkel is a regular contributor on portfolio construction theory and strategy on AdvisorOne.

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