As private equity's attraction to the advisor industry stays strong, Genworth Financial Wealth Management and Cetera Financial Group both announced the completion of business sales on Tuesday.
Genworth Financial Wealth Management, located in Pleasant Hill, Calif., is moving forward as an independent company with the completion of its sale from Genworth Financial (GNW) to a partnership of two private equity firms, Aquiline Capital Partners and Genstar Capital.
Officials with the parent company said in March that the deal would take a $40 million after-tax loss, with $35 million recorded in the first quarter. Genworth Financial said proceeds from the deal would be used to address its debt due in 2014 or before. The company will continue to use the Genworth Financial Wealth Management name until it announces a new name later this year.
Gurinder Ahluwalia (left), president and CEO of Genworth Financial Wealth Management, said the firm's new investment partners shared a belief in the importance of independent financial advice and a commitment to serving advisor clients.
And unlike the firm's former publicly held owner, the new private equity owners offer the firm greater flexibility without the worries of reporting quarterly results as part of a larger corporation.
"In many ways, we are getting back to our roots and looking forward to taking our business to the next level," Ahluwalia said in a statement.
In a phone interview, Ahluwalia added that the firm's new name will be announced sometime between the end of October and the new year.
"We want a name that embodies where we are today and the importance we place on serving the advisor," he said. "Today is our first day as an independent company, and we're very aware that we are in the business of helping advisors become more successful."
Ahluwalia said he feels enthusiastic about his firm's future because private partners Aquiline and Genstar are equally enthusiastic about growing the business . "It's really fun when you have an alignment around that objective. We feel more empowered as an organization. There is flexibility in being able to take the longer view on what's really serving the advisor."
Genworth Financial Wealth Management is now developing products and services to support advisors and their clients. In the coming months, the firm plans to introduce new investment solutions and more efficient processes for managing client assets on its platform. The firm has approximately $20 billion in assets on its platform and helps more than 6,000 advisors.
