Merger-and-acquisition activity in the money management industry last year was more about broken engagements than successful marriages.
Volatile financial markets hampered deal-making in the industry, leading to another year of depressed activity.
Freeman & Co. LLC, the New York based M&A advisory and strategic management consulting firm, dubbed its annual report on asset management industry deals, “The Year that Wasn't.”
Worldwide, 181 money manager M&A deals were announced in 2011, with a total transaction value of $17.3 billion. That's one more deal than in 2010 but less than that year's $18.2 billion total transaction value, according to a report by New York-based investment bank Cambridge International Partners Inc.
The problem: a less-than-rosy economic environment meant buyers weren't willing to meet the price demands of sellers, said Eric Weber, a managing director at Freeman & Co.
“Buyers were being stingy,” Mr. Weber said.
Whether 2012 will be a better year largely will depend on whether the economy stabilizes and spurs new transactions, according to M&A specialists.
One continuing trend that could create new activity, even without economic improvement, they noted, is banks being forced to divest money management units to raise cash and meet tighter regulatory constraints. In fact, one potential deal in 2012 could be bigger than any of the transactions in 2011 in terms of deal value. Deutsche Bank Group is shopping its Deutsche Asset Management unit, with $730 billion in assets under management, and has set a price tag of around $2 billion.
2011 started out with markets performing well, fueling hopes that it would be a strong year for M&A activity.
It didn't turn out that way.