Vanguard raises $4 billion in private debt for Altruist deal

Vanguard Group has raised about $4 billion of private debt to finance its acquisition of Altruist, Bloomberg reported Nov. 10. Bank of America, Citigroup and JPMorgan arranged the private placement, people familiar with the matter said.

Vanguard announced the Altruist purchase in August, after an initial investment in 2020, and did not disclose the price. Private placements let a borrower raise money directly from institutional investors such as life insurers, typically avoiding the securities filings that accompany a public bond sale. Vanguard oversees about $13.3 trillion globally as of July 31, Bloomberg said.

For advisors on Altruist's platform, the debt raise means the announced Vanguard purchase has about $4 billion of institutional financing behind it. Altruist sells technology that lets independent advisors manage client money and run their firms in one place. It has positioned itself as a "modern custodian" alternative to Fidelity and Charles Schwab.

Altruist's Form ADV, filed March 24, reports $0 in regulatory assets, 0 accounts and 348 employees. Because the purchase price is not disclosed, the $4 billion cannot be read as the deal price.

As Private Wealth Daily previously reported, 706 of Fidelity's 986 RIA relationships sit below its $100 million minimum. Smaller RIAs below that line are the likely audience for an alternative platform with a $13.3 trillion parent.