Asset manager M&A activity for the first half of 2008 declined 9.6% from the same time last year amid the carnage in the capital markets, according to Jefferies Putnam Lovell.
In the first six months of this year, buyers committed about $10.6 billion to acquire partial or full ownership of 104 fund managers, compared to the $36.9 billion spent in 115 deals in the year-earlier period.
Assets under management changing hands totaled $909 billion, a 26% drop from the $1.23 trillion in the first half of 2007.
With shares of publicly traded asset managers tumbling 20% on average during the half, the number of IPOs for the sector fell to one from four the year before.
Interest in alternative asset managers remained strong, accounting for a record 38% of first-half transactions, up from 30% for the year-earlier period.
With buyers retreating to the sidelines and a growing number of sellers under pressure to raise capital, prices softened during the first half in a buyers market.
The report, titled Nowhere to Hide, predicted a similar pace of transactions in the coming 12 months. But with more wounded financial institutions under pressure to part with their asset management arms to raise capital, the aggregate deal value and assets under management changing hands is expected to rise, according to a Jefferies Putnam Lovell news release.
Aaron Dorr, a managing director with Jefferies Putnam Lovell, noted signs during the latest half of growing interest in cross-border asset management deals among Asian and Middle Eastern buyers, with Ping An Insurances purchase of a stake in Fortis Investment Management helping international deals account for more than 60% of assets acquired during the period.