Envestnet agreed to acquire Vestmark, adding portfolio management technology, trading and outsourced investment management services to Envestnet’s platform. The companies said the deal was expected to close in the fourth quarter.
Envestnet said it served more than a third of all advisors across its platforms and had $8 trillion in platform assets. Vestmark supported more than $2 trillion in assets and over 5 million accounts, according to the companies.
The transaction would add Vestmark’s trading, tax-transition and engineering capabilities and a complementary client base to Envestnet’s ecosystem. The companies said the combination would broaden the types of wealth management firms Envestnet could serve, including firms with institutional-grade trading operations, while allowing clients of either company to remain on their existing platforms.
Joel Bruckenstein, CEO and Founder of Technology Tools for Today (T3), told WSR that the transaction was largely about gaining scale and giving Envestnet access to a market it had struggled to penetrate.
“I don’t think they were particularly strong in the wirehouse space and it gives them access to that,” Bruckenstein said. “Some would argue that Vestmark has some technology that’s better than Envestnet.”
Envestnet and Vestmark said they would continue investing in their existing product roadmaps, including VestmarkONE, VAST, Envestnet Enterprise, Tamarac and MoneyGuide, with additional investment in AI-focused workflows and integration.
Over time, Vestmark clients would gain access to Envestnet’s reporting and planning capabilities, including Tamarac and MoneyGuide, while Envestnet clients would gain access to more modular trading, rebalancing and tax-transition capabilities, including VestmarkONE, VAST and Vestmark’s Pulse AI-powered monitoring and intelligence tools, the companies said.
The companies also said the combination could support new AI-enabled capabilities designed that surface insights earlier and make personalization easier to deliver at scale.
Asked why Envestnet believed now was the right time for the acquisition, a spokesperson from Envestnet told WSR that advisors and their firms were demanding increasingly sophisticated trading and tax solutions. The spokesperson said the combination would allow Envestnet to “support every trading model – advisor traded, administrator traded and now centrally traded.”
The spokesperson said the companies would operate independently until the transaction closed in the fourth quarter and said Envestnet could not yet comment on whether Vestmark management would remain after closing or whether the Vestmark name would continue.
“Wealth management offerings have been siloed for too long, with advisors, traders, and portfolio managers each locked into their own piece of the puzzle,” Envestnet CEO Chris Todd said in the press release. “Bringing Vestmark into the Envestnet ecosystem changes that. Wherever a firm sits today, and wherever they’re headed next, they’ll have a platform that can grow with them.”
Todd added, “Our AI strategy unifies, orchestrates, and personalizes the advisor experience at Envestnet, and will extend across Vestmark’s workflows too. That’s a real reimagining of how advisors do their jobs.”
“For 25 years, Vestmark has focused on helping wealth management firms navigate increasingly complex portfolios with greater scale, personalization, and efficiency,” Vestmark CEO Karl Roessner said in the press release.
“Envestnet and Vestmark bring complementary capabilities and expertise to the market, and together we can create something neither company could deliver on its own,” Roessner said. “We will build on the technology, services, and client relationships that have made Vestmark successful, while accelerating investment in portfolio management, tax management, and AI-driven capabilities that help wealth management firms operate more efficiently and deliver better outcomes for their clients.”
Ropes & Gray acted as legal advisor to Envestnet. UBS, Goldman Sachs, RBC Capital Markets, J.P. Morgan Securities and Morgan Stanley acted as its financial advisors.
WilmerHale served as legal advisor, and Raymond James & Associates and Berenson & Company acted as financial advisors to Vestmark.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
