Vanguard Group has raised about 4 billion dollars of private debt to finance its acquisition of Altruist, the digital platform and custodian for independent financial advisers, Bloomberg reported on November 10, citing people familiar with the matter. The borrowing was done in the private placement bond market, where debt is placed directly with institutional investors such as life insurers.
Bank of America, Citigroup and JPMorgan Chase arranged the transaction, according to the same reporting. Representatives for Vanguard, Citi and JPMorgan declined to comment. Terms, maturities and pricing were not reported.
Vanguard, which oversees about 13.3 trillion dollars in global assets as of July 31, announced the Altruist acquisition in August, having first invested in the company in 2020. Earlier reporting put the all cash price at about 4.6 billion dollars, a figure the companies have not confirmed. The acquisition is Vanguard’s push into adviser custody and wealth management technology, a market dominated by Schwab and Fidelity.
The financing choice is itself informative. Private placements involve far less public disclosure than a registered bond sale, and they have become a standard funding route for large private borrowers this year. For Vanguard, whose ownership sits with its funds and their investors, acquisition debt of this size is new territory, and its interest cost will be borne inside the at cost structure its clients are used to.