BERWYN, PA — Envestnet agreed to acquire Vestmark in a deal that would add a portfolio-management and trading platform supporting more than $2 trillion in assets and over 5 million accounts, expanding Envestnet’s reach among large wealth-management firms while adding tax-transition and engineering capabilities.
The companies expect the transaction to close in the fourth quarter, subject to customary conditions. Terms were not disclosed.
Envestnet serves more than a third of financial advisers across its platforms and reports $8 trillion in platform assets. Vestmark provides portfolio-management technology, institutional trading and outsourced investment-management services to wealth-management firms.
The acquisition would extend Envestnet’s platform further into institutional-grade trading and more complex portfolio operations, broadening the range of firms it can serve from emerging registered investment advisers to large advisory businesses.
Vestmark also brings a client base that complements Envestnet’s existing relationships. Envestnet has historically worked with independent broker-dealers, scaled RIAs and hybrid firms, while Vestmark has experience serving wirehouses and firms operating institutional trading platforms.
Envestnet plans to maintain the companies’ existing product roadmaps rather than require customers to migrate platforms as a result of the acquisition.
VestmarkONE and VAST will remain part of the combined offering, while Envestnet plans to continue development of its Envestnet Enterprise, Tamarac and MoneyGuide products. Its existing roadmap includes Wealth Trading, Report Studio, expanded alternative-investment offerings and additional MoneyGuide capabilities.
Over time, Envestnet expects to make its reporting and financial-planning capabilities, including Tamarac and MoneyGuide, available to Vestmark customers. Envestnet clients are expected to gain access to Vestmark’s trading, rebalancing and tax-transition capabilities, including VestmarkONE, VAST and its Pulse artificial-intelligence monitoring tools.
The companies also plan additional investment in AI-based workflows, using Vestmark’s engineering and product teams to expand development capacity across the combined operation.
“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 Chief Executive Officer Chris Todd stated.
Todd stated that Envestnet intends to extend its AI strategy across Vestmark’s workflows while continuing investment in the existing products of both companies.
Vestmark Chief Executive Officer Karl Roessner stated that the combination would increase investment in portfolio management, tax management and AI capabilities while preserving Vestmark’s existing technology, services and customer relationships.
Vestmark’s products and client-facing teams will continue serving wealth firms, asset managers and advisers following the acquisition. Customers of either company will not be required to switch platforms because of the transaction.
Ropes & Gray LLP is Envestnet’s legal adviser. UBS, Goldman Sachs & Co. LLC, RBC Capital Markets, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are serving as its financial advisers.
WilmerHale LLP is Vestmark’s legal adviser, with Raymond James & Associates and Berenson & Company serving as financial advisers.
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