An anticipated spate of industry consolidation in 2009 is stalled at midyear, with potential buyers of high-profile money managers either refusing to commit or walking away from potential deals.
Disagreements over pricing, the difficulties of extricating money managers from banking parents and disparate views on how markets will do are all hobbling progress, investment bankers say.
Industry sources cite Aberdeen Asset Management Inc. as the latest wallflower. Considered a leading bidder for Delaware Investments in recent months, Aberdeen dropped out of the running recently, with Macquarie Group now seen as the top contender for the equity and fixed-income manager, observers say.
According to one source, Aberdeen and Delaware parent Lincoln Financial Corp. couldn't agree on pricing or the role of Delaware's management team. Spokesmen for Aberdeen and Lincoln declined to comment.
MassMutual Financial Group, meanwhile, pursued Janus Capital Group Inc. in recent months, but in June the boards of both companies couldn't reach final agreement on a deal, and talks ended, according to one source, who declined to be named.
Sources say the deal, which under one plan called for merging MassMutual's OppenheimerFunds subsidiary into Janus in return for Janus stock, would have provided Janus with the scale its CEO, Gary Black, has been seeking to better compete in a consolidating industry. It also would have filled a growth equity gap for OppenheimerFunds' strong distribution force at a time when that firm's other product segments have been struggling.
Sources said disagreements over pricing and financing, as well as concerns about legal challenges facing OppenheimerFunds' Tremont Group Holdings hedge fund-of-funds unit, helped trip up negotiations.
Likewise, Janus and Franklin Resources Inc. couldn't come to an agreement on price, said the one source. Spokesmen for Janus, MassMutual, OppenheimerFunds and Franklin all declined to comment.
Federated Investors Inc., meanwhile, is no longer in the running for Columbia Management, leaving Ameriprise Financial Inc., and possibly Invesco Ltd., among that firm's less than ardent suitors.
And AIG Investments remains in play more than six weeks after sources familiar with the bidding confirmed that a consortium led by Franklin Resources and private equity firm Crestview Partners LP were in exclusive talks to purchase that firm.