Freeman: Money manager M&A numbers down 12% in 2013

AUM changing hands rises 33% despite fewer deals

Global money management merger-and-acquisition activity decreased 12% to 120 deals in 2013, according to a Freeman & Co. report issued Monday.

The money management transactions announced in 2013 represented $1.8 trillion of assets under management, up 33% from the 2012 figure. The number of deals involving more than $10 billion in AUM, increased modestly to 27 in 2013 from 26 in 2012, while the number of deals between $1 billion and $10 billion decreased 20% to 75.

In the U.S., there were 69 transactions last year, down 13% from 2012; the 42 announced money management transactions in Europe were relatively flat against the 43 transactions in 2012.

“Institutional investors are changing the ways in which they allocate to alternatives,” according to the Freeman report. “In 2013, we saw robust M&A activity in the illiquid space, such as private equity and real estate, as managers began to add capabilities to manage separate accounts across the entire spectrum.”

Meanwhile, private equity transactions involving financial institutions totaled 102 in 2013, down 11% from the year before, with total transaction value totaling $26.2 billion in the year, slightly down from $28 billion in 2012.

In 2013, large independent asset managers, such as ORIX and Aberdeen, continued to pursue their growth ambitions, acquiring large autonomous groups with broad ranges of strategies from banks, according to the report. Orix purchased Robeco Group and Aberdeen, Scottish Widows Investment Partnership.

“In 2014, larger franchises will continue to expand their allocation capabilities in these areas as smaller independent business models feel pressure in expanding distribution,” the report added.