U.S. Bancorp on Thursday said it would receive a 9.5% stake in Chicago firm Nuveen Investments Inc. in exchange for the bank's long-term asset-management business FAF Advisors.
The parent company of U.S. Bank said the transaction would add about $25 billion of such assets to Nuveen, which will manage a combined $175 billion in institutional and retail assets at the close of the transaction. Nuveen provides investment services to high-net-worth investors and the consultants and advisers who serve them.
FAF and Nuveen Asset Management will operate under Nuveen's name with operations in Chicago and Minneapolis once the strategic alliance is completed. The deal is expected to close before the end of the year.
U.S. Bancorp will retain the investment products and capabilities to support custom cash management, securities lending, and stable value and advisory services to the First American Money Market Funds. That team will be led by Joseph Ulrey, who will be named chief executive of U.S. Bancorp Asset Management.
U.S. Bancorp, one of the largest banks in the U.S., last week reported its second-quarter earnings rose 63%, beating analysts' expectations, as revenue jumped to a record level and loan-loss provisions fell.
Shares were up 11 cents to $24 in recent trading.