Envestnet isn’t talking about it, but the Chicago-based provider of outsourced investment management and financial technology sure looks to be a company preparing for a sale.
On top of closing its Chicago headquarters,
Multiple sources expressed concern about a changing corporate culture, employee morale and CEO Bill Crager's visibility. Envestnet denies this, pointing to a company town hall hosted by Crager last week and the CEO's recent visit to Envestnet's Raleigh, North Carolina office, which will remain open.
However, one source, who asked to remain anonymous due to their relationship with the company, said Crager, "wasn't even on the call when they announced to all the employees that the offices were closing."
An Envestnet spokesperson confirmed for Financial Planning that it planned to relocate its headquarters to Berwyn, Pennsylvania, and that it also plans to close the Seattle office. In addition to Berwyn and Raleigh, Envestnet will maintain an office presence in Denver.
Though Crager deferred announcements regarding office closures to local leaders, he addressed employees in the company town hall, an Envestnet spokesperson said. "Here he emphasized the modernization of Envestnet’s workforce, the value of flexibility and the 'hub and remote' environment Envestnet is creating for its employees."
In February, Envestnet was reportedly
“As a matter of corporate policy, we do not comment on rumor or speculation in the market,” said the Envestnet spokesperson.
Envestnet never recovered from the loss of co-founder and former CEO Jud Bergman,
“It’s just too good of a time to not post themselves up for sale,” they said, adding some interested buyers could look to spin off parts of Envestnet’s business, such as the RIA technology company Tamarac or Yodlee’s data aggregation capabilities. “They keep ENV as the core platform and maybe keep on [financial planning software] MoneyGuide while things like
Former Yodlee CEO Anil Arora left the Envestnet board in October and now serves on the board of directors at wealthtech startup TIFIN,
GeoWeatlh, a recent entrant into the TAMP and advisor technology space, says it has hired two former vice presidents from Envestnet in the past three months.
“[Envestnet] has been making this move to the Philadelphia area for years,” said Colin Falls, president of GeoWealth. “That leaves opportunity for firms like ours to attract talent.”
An Envestnet spokesperson denies that the office closures are in any way tied to cost cutting, and said the move to Pennsylvania is the best approach for employees and offers opportunities for in-person collaboration and innovation.
“We currently provide maximum flexibility to our workforce with a hybrid approach that offers both remote work and hub office locations,” the spokesperson said in an email. “As a cloud-first SaaS company, we have the technology and solutions in place to support our teams and clients in the field and on the go.”
Falls disagrees that the company is pursuing privatization because it has grown too large to operate efficiently. Instead, the company has realized that while its true value is as a software company, the market still values it as an asset management firm.
“It’s easy to rag on the largest wealthtech provider in the independent space, but they serve trillions of dollars in assets and tens of thousands of advisors. And there’s a reason they do. They’re very capable and confident,” Falls said.
Editors note: This story has changed to include comments from Envestnet and clarifications to characterizations of its CEO's visibility.
