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Money Management

PwC: Money management M&A activity picks up in the third quarter

M&A or Merger and Acquisition text on black block

Disclosed money management merger and acquisition activity in the third quarter totaled $2.4 billion, up 20% from the second quarter, shows a report by PricewaterhouseCoopers.

The report said there were 35 transactions in the quarter, up 25% from the quarter ended June 30.

But the increased activity was centered on wealth management firms, which accounted for 70% of total deal volume, PwC said. That is similar to the second quarter when 68% of the 28 deals focused on wealth management.

"Deal activity for asset manages on the other hand continued to be slower than expected," the report said, "despite the widely held belief that the industry is due for consolidation and M&A activity will play an important role in such expected consolidation."

The report attribute the slower than expected activity to "expectation gaps between buyers and sellers."

However, the report did find that asset management M&A deals nearly doubled in the third quarter from the second quarter, with 11 deals compared to six. It said the M&A market for both traditional and alternative asset managers "is active and we expect will continue to be active."

The largest disclosed deal in the quarter was Invesco (IVZ)'s acquisition of Guggenheim Investments' ETF business for $1.2 billion, the report said. Other deals it cited include MetLife's acquisition of Logan Circle Partners from Fortress Investment Group for $250 million and New Star Financial's acquisition of Fifth Street CLO Management for $16 million.

PwC officials were unavailable for additional comment.