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Practice Management > Building Your Business > Dealmaking

Warburg Pincus Buys Stake in Edelman Financial Engines

By Melanie Waddell

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What You Need to Know

  • With Warburg investment Edelman Financial Engines said it enters “its next phase of growth.”
  • The investment values the company at $7.3 billion.
  • Deal expected to close in the second quarter.

Warburg Pincus, a private equity firm, will become a minority owner of Edelman Financial Engines.

Edelman, an independent financial planning and investment management firm, along with lead investor Hellman & Friedman, a private equity firm, announced Warburg’s strategic investment Tuesday.

The investment values the company at $7.3 billion and is expected to close in the second quarter.

Financial Engines and Edelman Financial Services, the RIA founded by Ric Edelman, completed their merger in 2018. Private equity firm Hellman & Friedman, which owns a majority interest in Edelman, handled the deal.

Since the merger, Edelman Financial Engines “has continued to expand and enhance its service offering,” growing its assets under management by nearly $100 billion, the firm said in a statement.

The firm had $260 billion in AUM as of Dec. 31.

With the backing of Hellman & Friedman and Warburg Pincus, Edelman Financial Engines said it enters “its next phase of growth grounded in its unwavering mission to bring more financial help to the many that need and deserve it.”

Larry Raffone, president & CEO of Edelman Financial Engines, said the “new investment from Warburg Pincus alongside the continued support from Hellman & Friedman demonstrates the abundance of opportunity ahead for our business. Our record growth in 2020 created momentum that has continued into 2021.”

Michael Martin, Managing Director of Warburg Pincus, who will join Edelman’s board, added in the statement that “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.”

Warburg Pincus believes 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,” Martin said.

Melanie Waddell

@Think_MelanieW

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