DHFL promoters sell stake in wealth management business to employees

In a separate transaction, LGT group, global private banking and asset management firm, has acquired a substantial majority stake in the Validus Wealth

Within 10 months of starting wealth management business WGC Wealth, Wadhawans, the promoters of beleaguered Dewan Housing Finance Corporation (DHFL), have exited the venture by selling stake to employees. The unit was renamed Validus Wealth after the transaction.
 
In a separate transaction, global private banking and asset management firm LGT Group acquired a majority stake in Validus Wealth. Validus Wealth released a statement but did not disclose financial or ownership details of the deals.
 
Senior executives with financial sector advisory firm said though WGC Wealth was promoted by Wadhawans, it was being run independently by professionals.
 
Facing pressure of meeting repayment obligations for housing finance unit DHFL, Wadhwans have been divesting group businesses. They have sold Aadhar Housing Finance to PE firm Blackstone. They have also sold education finance subsidiary, Avanse Financial Services, to an affiliate of the Warburg Pincus Group. They are also in process of selling stake in life insurance firm and mutual funds.
 
Lenders to DHFL will meet early next month to hammer out a rescue package, which will include the reworking of loan payments, fresh working capital support, roping in a financial investor, and the promoters ceding control.
 
Thursday’s transaction is expected to conclude within the next two to three months, subject to approvals from the financial regulator. Validus Wealth will become part of the LGT Group but will continue to be led by Atul Singh, its current founder and chief executive.
 
Apart from the shares Europe-based LGT Group picks, the remaining shares will continue to be held by the company’s current management team that opted for an employee buyout. The company will develop a full service platform in India, offering investment advisory, portfolio management, research, and wealth planning services.
 
In the coming years, the range of services is likely to include financing, it added. With presence across nine cities (Mumbai, Delhi, Bengaluru, Chennai, Pune, Goa, Hyderabad, Ahmedabad, and Chandigarh), Validus Wealth employs nearly 150 wealth management experts.
 

Wadhawans exits & sale in pipeline

• WCG Wealth sold to employees 
• Aadhar Housing finance sold to Blackstone
• Avanse Finance, Education loans unit sold to Wargburg
• Stake in Life Insurance and Mutual Fund on the block
• To get financial investor in DHFL