Asset manager M&A activity rose 33% to 69 transactions worldwide in the third quarter, according to Jefferies Putnam Lovell.
Total disclosed deal values rose to $6.4 billion, about 5% more than the $6.1 billion in the third quarter of 2007. However, assets changing hands more than tripled to $1 trillion in the period, up from $300 billion in the year-ago quarter.
As we anticipated, tremors transforming the global financial landscape have served as a catalyst to asset management deal flow, Aaron Dorr, a New York-based managing director at Jefferies Putnam Lovell, said in a news release. Divestures constituted 40% of total sales for the quarter, up from 23% in the year-earlier quarter.
In the short term, we expect more banks and other cash-strapped financial institutions to retreat from owning money managers, private equity firms to step up their growing involvement in the sector, and consolidation among hedge fund companies and other alternative asset managers as firms grapple with investor redemptions and lack of liquidity, Mr. Dorr said.