Wed, 02/07/2014 - 14:12
Envestnet is to acquire Placemark Holdings, a firm that develops unified managed account (UMA) programmes and other portfolio management outsourcing solutions for banks, full-service broker-dealers and RIA firms.
Placemark’s patented portfolio overlay and tax optimisation service bolsters Envestnet | PMC’s product and service offerings for investment advisors, who are increasingly turning to UMAs to meet diverse investor needs.
The UMA structure builds on the success of previous-generation separately managed accounts, combining multiple investment products into one account and delivering automated rebalancing and customisation services that allow for more tailored investment solutions.
“Placemark delivers an efficient model of investing through its focus on unified account management and value-added overlay services, both of which are critical for fee-based financial advisors to meet the unique needs of their clients,” says Jud Bergman, chairman and chief executive officer, Envestnet. “This acquisition significantly expands Envestnet’s presence in the full-service broker-dealer channel, giving us added resources to serve a broad spectrum of wealth management needs, while delivering increased value to our shareholders.”
Placemark had approximately USD14 billion in UMA assets under management as of 31 March 2014, which would boost Envestnet to number five on the list of top UMA providers in the industry with USD24.7 billion in assets, according to Cerulli rankings.
Placemark CEO Lee Chertavian will join Envestnet as group president of Envestnet | Placemark.
“Placemark has created significant momentum in delivering customisable UMA and overlay solutions to our customers, which is critical for simplifying the delivery of sophisticated and diverse strategies to investors,” says Chertavian. “Having access to Envestnet’s broad wealth management platform solutions should accelerate many of our strategic initiatives, addressing our customers’ existing and emerging wealth management needs.”
Envestnet will initially operate Placemark’s web-based UMA platform technology in tandem with its platform. A full integration and consolidation is expected in 2016.
Envestnet has agreed to acquire Placemark for USD66 million in cash upon closing. The transaction is subject to customary closing conditions, including customer consents, and is expected to close during the second half of 2014.
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