Absent are many of the large European firms that were looking to get a foothold in the U.S. asset management business and the holding companies that are now in divestiture mode. These include Commerzbank AG, Frankfurt (which sold off Montgomery Asset Management, San Francisco, and Martingale Asset Management, Boston) and Old Mutual's U.S. asset management group, which has sold off 19 affiliates in the past three years.
Among the firms said to be on the block are AMR Investment Services Inc., Fort Worth, Texas; Fremont Investment Advisors, San Francisco; Cadence Capital Management, Boston; Edinburgh Fund Managers, Edinburgh; Ark Asset Management Co. Inc., New York; and Neuberger Berman. Also, the corporate trust business of Bank One Corp., Chicago, is up for sale, sources said.
Two recent deals — San Francisco-based Charles Schwab & Co Inc.'s acquisition of State Street's private asset management business, and Minneapolis-based American Express Financial Corp.'s acquisition of Threadneedle Asset Management, London — may be a sign of things to come.
The State Street/Schwab deal and the potential acquisition by Lehman of Neuberger reflect the growing interest in the high-net-worth area, said John Temple, managing director at investment bank Cambridge International Partners Inc., New York.
According to data from Putnam Lovell NBF Securities, San Francisco, about 25% of the 63 asset management firms acquired this year had private client businesses.
Mr. Greenwald said the high-net-worth business isn't as fee sensitive or performance sensitive as the traditional institutional marketplace.
Investment bankers also say the Threadneedle deal represents a trend toward foreign asset managers being acquired by U.S. firms, the opposite of the trend three years ago.
SNL Financial LC tracks money management M&A activity. Its statistics show the percentage of private client and foreign-based acquisitions continues to rise, said Ryan Davis, senior mergers and acquisitions analyst. Year to date, he said, eight U.S.-based companies have bought foreign asset managers, compared to 10 in all of 2002 and three in 2001. Also year to date, there have been 16 deals involving money managers in the private client business, vs. 23 in all of 2002 and 15 in 2001.
There have been several other acquisitions of foreign-based business this year alone, Newark, N.J.-based Prudential Financial's purchase of Hyundai Investment & Securities, Seoul, and State Street's acquisition of the custody business of German bank Deutsche Bank AG, Frankfurt.
William Katz, managing director at Putnam Lovell, expects interest to pick up as the market improves and earnings stabilize.
One of the few holding companies still in acquisition mode is AMG, which trolls for firms mainly in the small to midsized space. AMG, majority owner in 17 money management firms, is rumored to be courting AMR Investment Services. Sean Healey, president of AMG, had no comment. TA Associates, a Boston private equity firm, also is a rumored suitor. P. Andrews McLane, senior managing director, did not return phone calls by press time; spokesman Phil Nunes said company officials had no comment on the matter.