"If you're one of these three companies, you want to be able to convert your assets into a currency by doing a deal with a publicly traded independent firm," said Mr. Snowling. With BlackRock and Legg Mason out of the picture for now, he added, San Mateo, Calif.-based Franklin Resources Inc. and Baltimore-based T. Rowe Price Group Inc. become the most attractive potential partners for any motivated sellers.
Janus Capital Group, Denver, whose management team was reportedly pursuing a buyout of the firm until last month, is also viewed as an attractive and "reasonably priced" target for a merger, said one source.
But some of the largest potential players might already be occupied with smaller targets. Morgan Stanley executives, who reportedly pursued a merger with BlackRock earlier this year, have said they will try to build the firm's asset management business by making smaller acquisitions or hiring teams to launch new investment strategies, specifically in alternative investments.
Meanwhile, according to one source, Franklin Resources has expressed an interest in bidding on the Gartmore Group's U.K. funds business, which has been put on the block by its parent, Nationwide Financial Services Inc, Columbus, Ohio. Lisa Gallegos, spokeswoman, said the company does not comment on speculation.