Warburg, General Atlantic sell 50% stake in Santander AM

Amedeo Goria
18 November 2016

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Private equity funds Warburg Pincus and General Atlantic have sold their 50% stake in Santander Asset Management (Santander AM) to its previous owner, Banco Santander.

Following the transaction, the Spanish lender will regain full ownership of the asset manager. Santander AM is keen on using the capital injection to boost its range of products, according to a statement. Currently, the company contributes €1.1bn to the annual fee income of Santander, which also said that the deal will increase its earning per share above 1% starting from 2018.

According to a source familiar with the situation, the deal was a private negotiation between the GPs and Santander, and followed the recent end of talks between Santander and Italian lender Unicredit about the merge of their asset management businesses, Santander AM and Pioneer.

As part of the present deal, Santander and the two private equity managers also agreed to work on the sale of their stake in Allfunds Banks, an investment fund platform, via trade sale or IPO. Currently, the platform's ownership is equally split between Santander AM and Italian lender Intesa Sanpaolo.

According to Italian press reports, several private equity funds showed interest for Allfunds, including Bain Capital, Advent, Cinven, Permira, BC Partners and Hellman & Friedman.

Founded in 2000, Allfunds has €200bn in assets under management and reportedly generated €125m in EBITDA in 2015. According to press reports, the deal could value the business at 16x EBITDA.

Previous funding
In May 2013, Santander sold a 50% stake in its asset management arm to Warburg Pincus and General Atlantic. The transaction valued the business at €2bn and generated a capital gain for Santander of €700m, according to a statement. At the time of the acquisition, the company had €152bn in assets under management.

Company
Headquartered in Madrid, Santander AM is a global asset manager with €173bn of assets under management across the European and Latin American markets.

The company has 700 employees worldwide.

People
Banco Santander – Ana Botín (chair).
Warburg Pincus – Daniel Zilberman (managing director).
General Atlantic – Jonathan Korngold (managing director).

Advisers
Vendors – Cleary Gottlieb Steen & Hamilton (legal).