Private equity firms Genstar Capital and Aquiline Private Equity are in exclusive talks to jointly buy Genworth Financial’s wealth management business, along with its San Francisco, CA-based alternative investment unit Altegris, a report says.

Private equity firms Genstar Capital and Aquiline Private Equity are in exclusive talks to jointly buy Genworth Financial’s wealth management business, along with its San Francisco, CA-based alternative investment unit Altegris, Reuters reports, citing “two sources familiar with the situation”.

In October last year media reports said that Genworth intends to sell two of its businesses, including its Pleasant Hill,CA-based wealth management operation. Four months on and the Richmond, VA-based firm is disposing the businesses due to “increased scrutiny from ratings agencies, largely due to losses in its mortgage business,” the news service said. One of the sources is quoted as saying that the deal for both businesses could be valued at over $400 million.  

Genworth is reportedly working with Goldman Sachs on the deal, while Genstar and Aquiline liaise with Deutsche Bank. The German bank and Genworth declined to comment to Family Wealth Report; Reuters said that all firms declined to comment.

Genworth’s wealth management business has some $20 billion in assets under management and sells its portfolios through about 6,000 third-party advisors across the US. The firm bought Altegris, which has $3.47 billion in client assets, in 2010 for $35 million.

Net operating income at Genworth’s wealth management segment was $8 million for last year's fourth quarter, down from $10 million in the prior year final quarter. Back in Q3 2012, the firm reported a $2 million year-on-year decline in net operating income at its wealth unit. At the end of the final quarter for 2012, there were about 6,240 advisors with assets on the platform.

Meanwhile, at the start of 2013 Thomas McInerney started in his new role as Genworth's president and chief executive. He has joined the board of directors, while James Riepe continues to serve as the firm's non-executive chairman of the board.