Strategically, the companies describe the deal as converting a four-decade sub-advisory partnership, which began in 1978 and formalized in 1984, into a single integrated firm. Wellington CEO and managing partner Jean Hynes said the combination builds on the fact that "Wellington and Hartford Funds have partnered together in support of advisors and investors" for more than 40 years. The Hartford's Chairman and CEO Christopher Swift said the deal "allows us to realize immediate and continued value for The Hartford's shareholders and positions Hartford Funds' exceptional people for ongoing success." Hartford Funds had approximately 160.2 billion dollars in discretionary and non-discretionary assets under management as of April 30, 2026, of which Wellington already sub-advised 83 percent; upon closing, Hartford Funds will be folded into Wellington's U.S. Wealth business and rebranded under the Wellington name, with the combined organization expected to include approximately 200 client-facing professionals.
The consideration structure, as disclosed in The Hartford's 8-K and corroborated in its Form 10-Q for the quarter ended June 30, 2026, consists of 300 million dollars in cash payable at closing plus contingent consideration equal to 95 percent of after-tax available cash generated by the combined Hartford Funds/Wellington wealth business (including sales of certain other Wellington-sponsored products), payable quarterly over an expected seven years following closing. That period can end early or be extended based on performance thresholds: if, starting five years after closing, the net present value of the quarterly payments plus the 300 million dollar upfront proceeds (discounted at 11 percent) reaches 2.1 billion dollars, the payment obligation terminates; if, at the end of the initial seven years, that net present value is below 1.5 billion dollars, payments continue until the threshold is met or for up to eight additional quarters. The Hartford's 1.9 billion dollar headline valuation is its own estimate of this contingent stream's net present value, calculated at an 11 percent discount rate, and is explicitly subject to the business's future market and operating performance rather than a fixed, guaranteed price. The agreement itself (and any investor presentation) was not filed as an exhibit to the 8-K, so terms beyond what is described in the 8-K's Item 8.01 narrative and the press release are not disclosed in the SEC record.
The Hartford's 10-Q discloses accounting mechanics not in the press release. Hartford Funds has been classified as held for sale and reported as discontinued operations beginning in the second quarter of 2026. Its reporting-unit goodwill of 272 million dollars was tested for impairment upon that classification; the fair value of the unit significantly exceeded carrying value, so no impairment was recorded. The Hartford recognized a 251 million dollar deferred tax asset and associated income tax benefit in the second quarter of 2026, reflecting the difference between Hartford Funds' tax basis and its U.S. GAAP carrying value; this is the figure that actually hit net income (slightly refined from the 250 million dollar estimate given in the original 8-K). As of June 30, 2026, total assets held for sale associated with Hartford Funds were 901 million dollars (515 million in cash and investments, 272 million in goodwill, 114 million in other assets) against 180 million dollars of liabilities held for sale. For the three months ended June 30, 2026, the discontinued Hartford Funds business generated 307 million dollars of total revenue (295 million of fee income) and 85 million dollars of pretax income, with net income from discontinued operations of 318 million dollars including the one-time tax benefit.
Prior to closing, The Hartford expects to receive a pre-closing dividend of approximately 170 million dollars from Hartford Funds. At closing, it expects to recognize an estimated after-tax realized loss of approximately 150 million dollars, reflecting the difference between Hartford Funds' GAAP carrying value and the 300 million dollar upfront cash proceeds; this loss is separate from, and not netted against, the contingent consideration, which will be treated as a gain contingency and recognized only as cash is actually received in future quarters. The Hartford estimates after-tax transaction costs through closing of approximately 55 million dollars, and expects initial quarterly contingent payments of approximately 65 million dollars once they begin, following the first full quarter after closing.
J.P. Morgan Securities LLC acted as financial advisor to Wellington, with Paul, Weiss, Rifkind, Wharton & Garrison LLP as Wellington's legal advisor. Goldman Sachs & Co. LLC acted as financial advisor to The Hartford, with Weil, Gotshal & Manges LLP as The Hartford's legal advisor.
The transaction has not yet closed. It is expected to close in the first quarter of 2027, subject to customary closing conditions including regulatory approvals and fund-level approvals (reflecting that Hartford Funds operates registered investment companies requiring board and shareholder approvals under the Investment Company Act). No merger agreement exhibit, investor presentation, or proxy statement has been filed with the SEC for this transaction as of the most recent 8-K on file (filed September 30, 2026, which does not reference Hartford Funds), and no termination fee or breakup fee is disclosed in any filing reviewed. No subsequent SEC filing confirms closing or termination of the deal.