NEW YORK — The notion of a management-led buyout of a firm that runs more than $100 billion in assets may have seemed absurd just a few years ago.
With the rise of private equity firms specifically providing capital to the money management industry, management-led buyouts have become increasingly common transactions, while the size of the firms involved has increased as well.
Some now speculate that a mega-MBO could take place in the money management industry if the right opportunity presented itself to a private equity player.
"There's certainly a ton of cash available to make that kind of deal happen now," said Robert Lee, senior vice president and analyst covering asset management for investment bank Keefe Bruyette & Woods Inc., New York.
Over the last year, management teams at Denver-based Janus Capital Group, which has $158 billion in assets under management, and Boston-based Putnam Investments, with $182 billion, have reportedly pursued buyouts, but costs have prevented any such deals from occurring. Firms such as U.S. Trust Co., New York, and Munder Capital Management, Birmingham, Mich., are other possible buyout candidates, according to investment banking sources.
Major private equity players that focus on the money management industry such as Hellman & Friedman LLC, San Francisco, and TA Associates Inc., Boston, would have the capital to support a deal for investment managers of this size, said executives for both firms.