The two companies are reportedly set to bid for the big bank's wealth management business
Macquarie Group is reportedly set to challenge Kohlberg Kravis Roberts (KKR) in the auction for Westpac’s $1 billion-plus wealth management business.
Promotional material for the sale, being handled by Morgan Stanley, is expected to be released this week, according to a report by The Australian.
KKR is expected to aggressively pursue Westpac’s wealth management unit through Colonial First State, which KKR owns in conjunction with Commonwealth Bank. KKR is currently the favourite to snap up Westpac’s wealth management business.
Both KKR and Macquarie have considered buying Australian financial services businesses before, both together and separately, The Australian reported. Previously, they partnered to consider a deal to buy AMP.
Macquarie has a platform that provides customers with cash management services, investment and superannuation products, financial advice, private banking and stockbroking, according to The Australian. Its wrap business reportedly has more than $100 billion under administration and generates annual profits of $100 million.
Westpac’s BT Panorama wrap platform offers clients access to a spectrum of tradable securities and investment wrappers. It is expected to be worth 17 to 19 times its earnings before investments and tax, The Australian said.
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As of November, Westpac reported that the platform had more than 230,000 customers with about $105 billion of funds under administration.
The platform was originally set to be sold last year, but the sale was delayed while KKR awaited approval to buy a stake in Colonial First State, The Australian reported.
