Wells Fargo sells $2B of private equity investments

Wells Fargo is making a profitable exit with $2B from its holdings in Norwest Mezzanine Partners and Norwest Equity Partners.

• The Players: Atalaya Capital Management and Pantheon Ventures Ltd took over Norwest Mezzanine Partners, dispensing a substantial $1B in net asset value. Meanwhile, Carlyle Group Inc.'s AlpInvest Partners and Lexington Partners joined the investment party.

• Wells Fargo's Role: Prior to the deal, Wells Fargo was the sole institutional limited partner in the funds.

• Behind The Scenes: Beyond the official statements, Wells Fargo and Atalaya have opted for silence.

• Where Do the Stakes Go: Most of these stakes wind up with credit-secondaries portfolios. The main stewards of these portfolios include Apollo Global Management Inc., JP Morgan Asset Management, and Tikehau Capital. These firms are the go-to for entities desiring to liquidate positions in otherwise illiquid funds, such as pensions and insurance companies.

• Fun Fact: Norwest and Wells Fargo share a long history, dating back to 1998 when Wells Fargo merged with the Minneapolis-based money manager, aiming to offer growth equity and credit investment in middle-market companies.

Banks like Wells Fargo have been shifting out of certain positions, aiming to build a robust liquidity buffer to confront any market volatility.