Wells Fargo, which has been losing advisors for several years due to multiple financial scandals, announced Friday the sale of its 65% stake in Washington, DC-based RockCreek Group to RockCreek Management.
The decision was mutual, made by senior management at both firms and “reflects their shared view that the transaction supports each firm’s strategic direction,” according to a press release from RockCreek. The sale is expected to be complete by the end of August. No details about the transaction were disclosed.
RockCreek Group functions as a global investment management firm with almost $14 billion in AUM and is one of several subadvisors of the Wells Fargo Alternative Strategies fund.
Its portfolio managers invest in emerging and frontier markets and alternatives on behalf of institutional clients including foundations, endowments, universities and pension funds, and its advisory board includes well-connected luminaries such as former Fed Chairman Alan Greenspan and former Council of Economic Advisers chair Laura Tyson, who worked in the Clinton Administration.
“We are confident that the broad-based independent ownership of our experienced team, coupled with our firm’s data-driven technology and innovative culture will ensure that we continue to preserve and grow our investors’ capital,” said Afsaneh M. Beschloss, CEO and Founder of RockCreek, one of the few women to head an investment management firm.
Wells Fargo did not release any statements other than a press release. The bank has been plagued by legal and regulatory issues for several years, including creating fake accounts, charging borrowers for car insurance they didn’t need and selling unsuitable investments.
But several months after the Federal Reserve barred the bank from future growth until it fixed its problems, the bank passed its latest stress test, allowing it once again to pay dividends and buy back stocks. The Fed approved its plan for roughly $33 billion in stock buybacks and dividends that will be more than double the amount approved after last year.