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Envestnet, a seller of specialised software and data tools for the wealth management industry, has agreed to be acquired by a US private equity group and a consortium of traditional asset managers.

The $4.5bn deal highlights how traditional asset managers are seeking to profit from savers’ increased longevity and a $90tn transfer of wealth to younger, more tech-savvy clients in the coming years. It underscores Wall Street’s belief that demand for independent wealth management services will continue to grow, as clients seek to avoid the high fees and potential conflicts associated with large financial groups.

Bain Capital, BlackRock, Fidelity Investments, Franklin Templeton and State Street Global Advisors are part of the consortium.

Envestnet’s tools are used by more than 100,000 financial advisers to manage more than $6tn in assets. Its business includes one of the industry’s largest fee-based technology platforms for asset management and access to a range of mutual funds, exchange traded funds and separately managed accounts alongside research and asset allocation advice.

State Street said it made a strategic investment to give its asset management arm “increased exposure to the growing independent wealth advisory and high net worth markets”. BlackRock views Envestnet as a distribution point for its wealth management business and has been an investor since 2018. Each stake is just below 5 per cent, people familiar with the terms said.

Bain and its partners, which also include New York-based private equity firm Reverence Capital, are planning to invest in a revamp of Envestnet’s technology and use the company’s scale with registered investment advisers to further consolidate the wealth management industry.

Marvin Larbi-Yeboa, a partner at Bain Capital, said in a statement the consortium would focus on “making further investments in its differentiated product offering”. Milton Berlinski, head of Reverence Capital, said the group was attracted to Envestnet’s “scale and competitive advantages in an industry that benefits from strong fundamental tailwinds”.

Bain will finance the acquisition with about $2bn in debt, according to two people briefed on the matter. Large banks RBC, BMO, Barclays and Goldman Sachs will provide some financing. There will also be a loan led by a group of private credit lenders consisting of Ares, Blue Owl and Benefit Street Partners, which is owned by Franklin Templeton.

In June, Envestnet announced it was working with the four asset managers in the buyer group — which have about $18.3tn in assets under management between them — to launch personalised strategies and consulting aimed at wealthy investors.

Thursday’s takeover comes amid a flurry of strategic ventures and takeover activity in the wealth management space.

Last month, US private equity group Advent International led a stake in Fisher Investments, one of the world’s largest registered investment advisers, worth up to $3bn, betting rising affluence and a transfer of wealth to millennial savers will bolster demand for wealth management services, according to a person briefed on its thinking.

Private equity groups such as Blackstone, Hellman & Friedman, Apollo Global and Clayton, Dubilier & Rice have also acquired large platforms serving registered investment advisers.

There were 79 asset and wealth management deals announced in the first quarter of 2024, the highest since early 2023, according to a recent study from PwC.

Investment in technology and a need to counteract a yearlong trend of decreasing fees are driving asset managers’ dealmaking appetites.

Additional reporting by Maria Heeter in New York