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Wells Fargo & Co. (NYSE: WFC) is selling $2 billion in investments in Norwest Equity Partners and Norwest Mezzanine Partners, a pair of firms that predate Wells Fargo's merger with the former Norwest Bank a quarter-century ago. The two firms will combine under a single entity, Norwest Capital Advisors, after the sale.
The Wall Street Journal has a report on the sale, disclosed Friday by San Francisco-based Wells Fargo. Buyers include private equity firm Carlyle's AlpInvest Partners, Atalaya Capital Management, Lexington Partners and Pantheon.
Chief Financial Officer Mike Santomassimo told the Journal that the move was part of Wells Fargo's efforts to focus on its core banking business. In a similar vein, the bank is scaling back its home mortgage business, once one of the largest in the nation, and sold off its asset-management arm.
Wells Fargo will continue its investment in Norwest Venture Capital, based in Palo Alto.
In the wake of the deal, Norwest Equity Partners and Norwest Mezzanine Partners, both of them based in Minneapolis, will operate under the common brand Norwest Capital Advisors, said Managing Partner Tim DeVries in a statement.
"We are immensely grateful to Wells Fargo for their longstanding partnership and for their support as we embark on the next phase of our firm’s growth and evolution," DeVries said.
The strategy of the two firms will stay familiar: NEP, led by DeVries, Sundip Murthy, Brian Allingham and Tony Armand, will invest in growing, profitable companies in the business services, consumer services, consumer products and industrials sectors. Recent exit deals by NEP include the sale of Minneapolis-based eywear brand Eyebobs to Blue Point Capital Partners and Bix Produce to a unit of Sysco Foods Corp.
The mezzanine unit will partner with private equity partners to create subordinate debt and equity capital deals for portfolio firms. That business will be led by Carter Balfour, John Hogan, and Sean Stevens. The firm will keep offices in downtown Minneapolis — the teams will shift from IDS Center to a new location in RBC Gateway tower this month — though it also recently opened an office in West Palm Beach, Florida.
Bay Area deposits as of June 30, 2022
| Rank | Prior Rank | Bank/Prior rank |
|---|---|---|
1 | 1 | Bank of America |
2 | 2 | Wells Fargo Bank |
3 | 3 | First Republic Bank |