Objective:
Wall & Main principals were key leaders on the Corporate Development team for Genworth Financial, following a spin-out by GE of its insurance business. Genworth immediately turned to the question of how to grow its portfolio of business to enhance shareholder value. After considerable deliberation supported by Corporate Development, the Board decided to enter the asset management business to drive earnings and multiple expansion with a “capital light” business. Within the asset management arena, the Corporate Development team recommended tapping the independent channel and specifically acquiring a Turnkey Asset Manager Platform (“TAMP”) that could serve as a fast-growing foundation for the new business line — and then to build around the platform with additional strategic acquisitions to enhance its product and service offerings.
Execution:
With the plan established, the Wall & Main team were charged to realize the goal from start to finish, beginning with identifying acquisition targets. Starting with a list of firms developed during the planning and strategy phase, we made cold calls which ultimately led to structuring two successful acquisitions, starting with a leading “TAMP” ($230MM) followed by an alternative asset manager to add products ($35MM). In the process, the team also structured and closed the acquisition of several broker-dealers’s as well as a consulting company to augment the TAMP platform, comprising a new wealth management division. All of these transactions involved complex structures including contingent consideration – designed by Wall & Main principals. Further, we helped lead all collateral efforts including the integration of the companies, structuring the compensation for new management and developing the Genworth communication strategy for the investment community.
Results:
In the end, the results were wholly aligned with the challenge and vision, with Genworth acquiring leading asset management enterprises in a growing channel, balancing the company’s overall business mix, and adding several industry leaders. The businesses generated strong cashflow and earnings and changed the perception of the company, driving multiple expansion and ultimately shareholder value. It was a critical step in the growth of Genworth as a new public company. Several years later, Wall & Main principals then led the Corp Dev efforts to sell the division at a substantial gain for over $400 million. In sum, the Wall and Main team executed with precision, creating value and lasting relationships.