Wells Fargo will sell its asset management business to two private equity firms for $2.1 billion. The deal announced Tuesday is the first major sale of CEO Charlie Scharf's drive to simplify the sprawling bank.

Chicago-based GTCR and New York-based Reverence Capital Partners will buy Wells Fargo Asset Management from the bank. Wells Fargo will hold on to 9.9% and remain involved as "client and distribution partner" of the asset manager, according to a bank press release.

"This transaction reflects Wells Fargo's strategy to focus on businesses that serve our core consumer and corporate clients, and will allow us to focus even more on growing our wealth and brokerage businesses," said Barry Sommers, the head of Wells Fargo's wealth and investment management division, in a statement.

The transaction is expected to close in the second half of 2021.

Established in 1995, Wells Fargo Asset Management is chiefly the bank's mutual fund business and manages $603 billion on behalf of institutions, financial advisors and individuals. It is separate from Wells Fargo's private bank, Abbot Downing and Wells Fargo Advisors.

More than 1,500 people work for Wells Fargo Asset Management in 24 cities.

Milton Berlinski, the managing partner of Reverence Capital, said in a statement that he wants to expand the asset manager's offerings as an independent company.

"As an independent organization, WFAM will pivot to the next phase of its growth," Berlinski said.

The sale is the biggest exit of a business by Wells Fargo under Scharf.

Since he took over in 2019, Scharf has pledged to cut the size of the bloated and underperforming bank, including exiting businesses that Scharf thought weren't core to Wells Fargo. Mutual funds, it is apparent, were not core.

Tuesday's announcement follows the smaller sales of the bank's private student loan portfolio in 2020 and Canadian direct equipment finance business this year.