Asset management M&A activity rose 28% in the first six months of the year, with 119 transactions, leaving 2008 on track to surpass the record 217 acquisitions seen in 2007, according to a report by investment bank Freeman & Co.
That momentum continued despite a decline in U.S.-based buying caused by the credit crunch, according to the report, titled “Reports of My Death Were Greatly Exaggerated.” It also predicted a growing number of cash-strapped banks will move to sell their asset management platforms over the coming year. While Freeman didn’t make specific predictions, the report listed National City, Fifth Third Bancorp, Lehman Brothers, Wachovia, Key Corp., SunTrust, Wells Fargo and US Bancorp as banks with asset management arms.
The first-half deals involved firms with combined assets under management of $906 billion, on pace to exceed 2007’s full-year total of $1.35 trillion.
While the impact of the past year’s market turmoil had been uneven, both geographically and in terms of market segments, it has spawned as many opportunities as difficulties, said Eric C. Weber, principal and COO of Freeman & Co.
Freeman & Co. noted that Asian buyers, led by China-based Ping An Insurance Co.’s purchase of a 50% stake in Fortis Investment Management, commanded a higher profile during the latest period. The number of deals involving Asian buyers, aside from the Ping An-Fortis transactions, slipped to 24 from 27 the year before, but AUM acquired jumped to $43 billion from $35 billion.
The number of deals involving traditional asset management firms rose nearly 23% from the year before to 58, while those involving alternative asset managers climbed only 12%.
