Swiss Bank UBS Agrees to Buy Wealthfront in an All-Cash Deal

Swiss Bank UBS

January 27, 2022

Reading Time: 2 minutes

Swiss Bank UBS is acquiring U.S. automated wealth management provider Wealthfront in a $1.4 billion all-cash deal. Wealthfront serves the next generation of investors, has over $27 billion assets under its management, and more than 470,000 clients in the U.S.

UBS-Wealthfront Deal Extends Swiss Bank’s Reach in the US

Wealthfront offers its clients its award-winning, state-of-the-art wealth management. Its services include access to financial planning capabilities, banking amenities, and investment management solutions. The venture-backed Robo-advisor Waterfront just raised over $200 million while being private.

By agreeing to buy Wealthfront, UBS extends its growth in the United States and accelerates its reach among the millennial and Gen Z affluent investors. Wealthfront’s acquisition by UBS brings the bank’s leading wealth management capabilities. UBS has impeccable leadership in its Chief Investment Office, the best global footprint, and a variety of world-class products and services.

In October, Swiss bank UBS first unravelled its ambitions to expand to the U.S. market. The bank stated it intended to build a digitally scalable advice model for affluent clients in the Americas. UBS was targeting clients with up to $2 million to invest.

Wealthfront’s acquisition by UBS means that the automated wealth management provider will become a wholly subsidiary of UBS. Wealthfront will operate as a business within the UBS Global Wealth Management Americas.

However, the announcement clarified that Wealthfront customers would not see any immediate change with this acquisition. The upside, of course, will be benefitting from UBS’s products, services, and intellectual capital.

$1.4 Billion Sale a Strong Win for Wealthfront

According to data from Pitchbook, Wealthfront was worth $700 million in 2014 and $500 million towards the end of 2017. The $1.4 billion sales, set to close in the second half of this year, may, therefore, be a strong win for the Wealthfront backers. With the public valuations, the exit price per this Wealthfront-UBS deal represents its final private valuations by twice or more.

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