Vanguard Raises $4 Billion in Private Debt to Finance Altruist Acquisition

✦ Meridian Analysis

Vanguard Group has signed a financing package of roughly $4 billion that will be used to close its acquisition of digital wealth‑management platform Altruist. The debt was placed directly with institutional investors in a private‑placement format, bypassing the public bond market, and was arranged by Bank of America, Citigroup and JPMorgan Chase. Vanguard, the buyer and issuer of the notes, is leveraging the capital to fund the deal it announced in August after a 2020 investment in the adviser‑focused technology provider. Altruist, which supplies custody and portfolio‑management tools to independent financial advisers, is the target asset; the lenders are institutional investors, including life insurers. The mechanics centre on a private‑placement loan that offers Vanguard a quicker, less disclosure‑heavy source of funding than a traditional public issuance. The market has also financed the National Football League and Chick‑fil‑A this year. Meridian reported on August 26 that Vanguard’s purchase price for Altruist was $4.6 billion. Deal professionals will be looking for the undisclosed terms of the financing, such as interest rates, maturity profile and any covenants, as well as the identity of any financial advisers that may have been engaged. The timetable for closing, any required regulatory clearances and the exact allocation of the debt across senior versus subordinated tranches also remain to be confirmed.

The Meridian Weekly