M&T Bank is selling part of its wealth-management business to a Chicago private equity firm.
Wilmington Trust, M&T's arm that provides corporate and institutional services and investment banking, has agreed to sell its collective investment trust business to Madison Dearborn Partners, the bank announced Monday. Terms of the deal were not disclosed. Buffalo, New York-based M&T said it expects the deal to close by the middle of 2023.
The business being sold provides asset managers and retirement plans with trustee and administrative services. It is part of Wilmington Trust's institutional custodial services business. Wilmington Trust also operates a wealth advisory segment.
As an independent company with a new brand name, the collective investment trust business will be in position to "expand new and existing relationships," said Vahe Dombalagian, managing director and co-head of Madison Dearborn Partners' financial and transaction services team.
The business, which currently manages about $115 billion in assets, will focus on "helping plan sponsors navigate complex retirement and regulatory challenges," Dombalagian added.
Madison Dearborn Partners invests in middle-market companies across five industries, including financial and transaction services.
The private equity firm agreed to pay $1.8 billion to acquire the money transmitter MoneyGram last February. Its past investments include other payments companies, including PayPal.
The transaction is the second sale this year by M&T's Wilmington Trust unit. In September, it announced an agreement to sell its 67-year-old insurance agency to Arthur J. Gallagher & Co., a global insurance brokerage.
The $198 billion-asset M&T acquired Wilmington Trust in 2011. Wilmington Trust, which had $10.7 billion of assets and 55 branch locations at the time, emerged from the 2008 financial crisis with poor credit quality in its banking loan portfolio, prompting its board to consider a merger.
