New York (HedgeCo.net) – The hedge fund division (Wells Fargo Securities) of $1.3 trillion financial services company Wells Fargo, has reached a definitive agreement to acquire Merlin Securities, a prime brokerage services and hedge fund tech provider.
“Merlin’s capabilities fill an important niche in Wells Fargo Securities’ product set and connect many activities where we already have expertise, including technology, custody, clearing, collateral management and execution,” said John Shrewsberry, head of Wells Fargo Securities. “This is a logical extension of our offering to the investment industry, which is increasingly focused on tools to enhance risk management and improve capital efficiency. In addition, it provides new cross-sell opportunities for existing customers of both Wells Fargo and Merlin. This transaction enhances our ability to meet customer needs and generate earnings for our shareholders, all while adhering to our disciplines of prudent risk management and controlled growth.”
Terms of the agreement were not disclosed.
As part of the transaction, Merlin’s team members will join Wells Fargo Securities. Managing partners Stephan Vermut and Aaron Vermut will continue to lead the Prime Services Offering. Merlin and Wells Fargo Securities will work closely with existing clients to continue to provide uninterrupted service and focus on clients’ ongoing needs.
“Wells Fargo is the perfect partner for Merlin and its clients,” said Merlin’s Stephan Vermut. “Together, our clients will have access to a greater range of products and financial resources that will augment the open architecture solutions that Merlin currently provides. This combination will enable us to expand our client base to a broader set of asset managers looking for the safest custodians and the best products available.”
The transaction, subject to regulatory approvals and other customary closing conditions, is expected to close during the third quarter of 2012. Greenhill & Co. served as financial advisor and Arnold & Porter served as counsel to Merlin. Wells Fargo Securities served as its own financial advisor with Morgan Lewis as counsel.
Merlin is a technology solutions provider and prime brokerage services firm offering integrated solutions to the alternative investment industry. The firm serves more than 500 single- and multi-primed managers, providing them with a broad suite of solutions including dynamic performance attribution analytics and reporting, seamless multi-custody services, capital development, 24-hour international trading, securities lending experts and institutional brokerage. The firm has offices in New York, San Francisco, Boston, Chicago, San Diego and Toronto. Merlin is a member of FINRA and SIPC.
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