U.K.-based targets of asset management firm mergers tend to outperform local peers after a deal, but they actually lag global money management firms over the long term, according to a report from Cerulli Associates. The report focuses on the more than 300 acquisitions in the asset management industry since 1990. Cerulli found that about two-thirds of U.K. target firms grew faster than the U.K. fund management industry following a deal, but at only half the rate of global asset management firms.
The report examines asset-gathering strategies used by the largest firms in the global asset management industry. In both the United States and United Kingdom, internal growth as opposed to mergers remains the only time-tested way to steadily increase assets under management, according to Cerulli. The growth rate of these "organically grown firms in the U.K. is 13% for the seven years ended Dec. 31, 2000, compared with 8% for the entire U.K. industry and15% for the global asset management marketplace.