By Jessica Toonkel
NEW YORK Feb 11 Private equity firms Genstar
Capital and Aquiline Private Equity LLC have teamed up and are
in exclusive negotiations to buy Genworth Financial Inc's
wealth management business and its San Francisco-based
alternative investment business, two sources familiar with the
Genworth is working with Goldman Sachs Group Inc,
according to the sources, who declined to be identified because
talks are confidential.
Genstar and Aquiline are working with Deutsche Bank AG
, said one of the sources, who estimated that the deal
for both businesses would be valued at $400 million to $450
A Deutsche Bank spokeswoman declined to comment, as did
spokesmen with Genworth, Genstar, Aquiline and Goldman.
Genworth stock was trading up more than three percent on
Monday at about $9.00 per share.
Richmond, Virginia-based Genworth Genworth, once part of
conglomerate General Electric Co, is offloading the
businesses as it faces increased scrutiny from ratings agencies,
largely due to losses in its mortgage business. Reuters first
reported in October that it was selling the two businesses
Genworth bought its turnkey assets management platform,
which was called AssetMark Investment Services, in 2006 and
merged it with Genworth Financial Asset Management to form
Genworth Financial Wealth Management. The wealth management
business has more than $20 billion in assets under management
and sells its portfolios through about 6,000 third-party
advisers across the country, according to the firm's website.
Genworth bought its San Francisco-based Altegris business in
2010 for $35 million plus additional performance-based payments.
The firm has $3.47 billion in client assets.
This month, Genworth Financial posted fourth-quarter profit
that topped Wall Street estimates, but the insurer reported a
sharp drop in earnings from long-term care insurance
Net income available to common shareholders rose to $166
million, or 34 cents per diluted share, for the quarter ended
Dec. 31, from $142 million, or 29 cents per diluted share, a
Operating earnings at the firm's long-term care insurance
unit fell 75 percent to $7 million in the fourth quarter.