NEW YORK — The money management industry will see more — and more interesting — mergers and acquisitions in 2006, as earlier deals predicated on elusive synergies between manufacturing and distribution continue to unravel, a Pensions & Investments roundtable of industry experts predicted.
Click here for complete roundtable transcript The number of deals of all sizes in 2005 was little changed from the year before, but 2006 should see both more transactions and more that are memorable. "There were 15 to 20 deals of note (in 2005) … I think we'll see 40 to 50 deals of note" in 2006, said Donald H. Putnam, managing partner of Grail Partners LLC, Boston.
The roundtable was held Dec. 13 in New York. The other panelists were: Matthew Barger, deputy chairman of San Francisco-based private equity shop Hellman & Friedman LLC; Sean M. Healey, president and CEO of Boston-based consolidator Affiliated Managers Group Inc.; Elizabeth Nesvold, managing director with Berkshire Capital Securities LLC, New York; and Kevin Quirk, managing director of Casey Quirk & Associates, Darien, Conn.
The bulk of this year's deals should involve midsize firms, with annual pre-tax income of about $50 million. After a year dominated by Legg Mason Inc.'s swap of its brokerage assets for Citigroup Inc.'s money management arm, a few megadeals could hit the headlines in 2006 as well, participants said.
The range of factors motivating sizable deals makes them hard to predict but, "I think the stars, the moon and the sun are aligned to see one or two pretty big transactions," said Mr. Barger.