Global asset management M&A activity moved into a new phase in the fourth quarter, driven by smaller transactions, ending a year in which megadeals were the highlight of mergers and acquisitions, according to the financial institutions group of Jefferies & Co.
Sixty percent of global asset management M&A in the fourth quarter of 2009 was in divestitures, and 61 independently owned managers changed hands during the year.
Deal volume for all of 2009 dropped 35% to 143, compared to 2008; however, a record high $4 trillion in assets under management changed hands, putting it 51% above the previous record year of 2006. Thirty of those deals were announced in the fourth quarter, compared to 45 in the fourth quarter 2008. Managed assets transacted for the year dropped 18% to $522 billion. “Significant strategic deals involving independent firms such as Advisory Research’s sale to Piper Jaffray and Metropolitan West Asset Management’s purchase by TCW will help determine deal-making activity in 2010,” according to a news release concerning the report.
However, “total disclosed deal value in 2009 was $24.9 billion, up substantially from the previous year’s $15.9 billion,” according to the news release.
“We expect divestitures to continue to play out through the first half of 2010 when the urgency of capital raising and strategic realignment of financial institutions should taper off,” Aaron Dorr, managing director at Jefferies’ Financial Institutions Group, said in the news release. “We also anticipate aging owners of independent firms who missed the last bull market to seek to transact in 2010 given improving market conditions, asset flows and pricing.”
Mr. Dorr could not be reached for further comment by press time.