Institutional assets under management acquired in merger activity in 2005 was the highest in the last five years, according to a report on the investment management industry by investment bank Berkshire Capital Securities.
Money management firms sold a total of $642 billion in assets under management last year, the largest total since 2001, when firms sold $593 billion in institutional assets.
Roughly $220 billion, or 34% of the assets sold, came from one transaction: Legg Mason's acquisition of Citigroup Asset Management, which had $437 billion in total assets, roughly half of which were institutional.
The remaining 36 institutional transactions that took place last year involved a total of $422 billion in assets, less than in 2004, when there were 36 institutional transactions that totaled $550 billion in institutional assets.
Aside from the Legg Mason-Citigroup deal, "other transactions within the U.S. were small and highly focused," said the report.
These deals included BB&T Corp.'s acquisition of Sterling Capital Management, which had $8 billion in fixed-income and equity assets; JPMorgan Asset Management's acquisition of high-yield fixed-income manager Pacholder Associates, with $2.5 billion in assets under management; HSBC's acquisition of emerging markets fixed-income manager Atlantic Advisors, which had $700 million; and Lazard Freres & Co.'s acquisition of Knelman Asset Management Group, which managed $250 million in relative value strategies.