“These are extreme circumstances,” said John Belgrove, London-based principal and investment consultant at Hewitt Associates LLC. “As such, there's always a chance that parent companies may come under pressure to raise capital and they might very well decide to sell the asset management businesses.”
Francesca Palermo-Patera, spokeswoman for UniCredit, said in an e-mail response, “Pioneer and asset management businesses are core to the bank.”
Naim Abou-Jaoude, chief executive officer of Dexia Asset Management, declined to comment via spokeswoman Dominique de Garady.
A parent company's financial position is also playing a bigger role in hiring decisions among institutional investors in Europe, according to consultants.
“One of the criteria for assessing managers is business strength and ownership,” Mr. Belgrove said. “Typically, having a large bank as a parent company means there's a nice, big capital base that can be used for funding certain activities such as R&D, which is important in asset management. But in these circumstances, that aspect may actually be weakening their position.”
Some independent managers also are under threat as they struggle under the weight of the market turmoil. For example, London-based New Star Asset Management Ltd., which suffered from unprecedented asset outflows in the past year, might become a ripe acquisition target, analysts said. The company's share price fell about 80% since the beginning of year, closing at 35.75 pence per share on Oct. 10. New Star spokesman Anthony Carlisle declined to comment. The firm managed £19.5 billion as of June 30, the latest available figure.
“It's difficult to predict what the (European asset management) landscape will look like because we don't know who is going to be around,” said Christopher Hitchings, London-based analyst at Keefe, Bruyette & Woods Inc. “At the moment, desperation is creating all sorts of opportunities.”
However liquidity constraints also will severely limit M&A activities as well as driving down prices, analysts said.
The “barbell” trend in asset management — in which the industry is increasingly concentrated on one end with large multiasset houses and on the other with boutique specialists — has been evolving for years, Mr. Belgrove said.
But the crisis now hammering the global banking system might be forcing that trend into a slightly new direction.
Some institutions that, before the crisis, had been shoring up their capital base now find themselves in a position to expand at the expense of the competition, consultants and analysts said. These include independent managers as well as money management subsidiaries of some insurance companies and banks, including Paris-based BNP Paribas Investment Partners.
According to an agreement announced Oct. 6, BNP Paribas will pay €14.5 billion in stock and cash for Fortis, based on market values at the time. In comparison, a consortium that included Fortis a year ago shelled out a hefty €71 billion for ABN AMRO. The debt assumed in the transaction helped spur funding problems that eventually led to Fortis' downfall and BNP Paribas' opportunity.
“Clearly they are buying a bank and an insurance company, but what they're also getting is a significant asset management business. That is a huge benefit, which lifts them to the fifth-ranking asset manager in Europe,” said Simon Maughan, a banking analyst at MF Global Securities Ltd., London.
Pending regulatory approval, the BNP-Fortis transaction would create a €549 billion multiasset manager. The combined group also would have another €214 billion in assets under management within its wealth management division. Liliane Tackaert, spokeswoman for Fortis, and Sandrine Romano, spokeswoman for BNP Paribas, both declined to comment on possible integration plans. However officials at BNP Paribas have said in conference calls to analysts that they intend to keep the asset management business of Fortis.