M&T sells part of its Wilmington Trust business to a Chicago private-equity firm

Wilmington Trust – which M&T acquired in 2011 – will sell its Collective Investment Trust business to Madison Dearborn Partners, which will set it up as an independent company with a new brand name. Neither party disclosed the terms of the deal, which is expected to close by mid-2023.

“The CIT business is an industry leader, well-respected, and recognized for its successful track record of innovation,” said Rob Barnett, executive vice president at Wilmington Trust, and the designated CEO of the new company. “This transaction will help ensure continued growth for our business, people, and clients well into the future.”

Collective investment trusts are bank funds that are restricted to participation by qualified defined-contribution plans – 401(k)s – and certain state or local government plans. They are not mutual funds and are not governed by the Investment Company Act of 1940 or the Securities Act of 1933. They are also not open to individual retail investors, nor for IRAs, health and welfare plans or even all Keogh plans.

Wilmington Trust’s CIT business – part of the bank’s Institutional Client Services division – works with asset managers and the employer-sponsored retirement industry to provide third-party trustee and administrative services. It currently manages about $115 billion in assets for more than 550 funds across 45 subadvisory firms, including prominent names like AllianceBernstein, BlackRock, Franklin Templeton, MetLife, Neuberger Berman and Raymond James.

The business has consistently grown revenues and assets since M&T’s acquisition of Wilmington Trust a decade ago, and officials said Monday that the acquisition will allow the new company to continue its growth and add services and offerings under Madison Dearborn, a private equity firm that has raised over $28 billion in capital and completed more than 150 acquisitions since its launch in 1992.