Divestments by European financial conglomerates could set the stage for a rebound in asset management merger and acquisition activity in 2012 from five-year lows in 2011, according to a report released Tuesday by PricewaterhouseCoopers.
Much will depend on whether the spike in market volatility that killed a number of deals during the second half of 2011 remains under control during the coming year, the report said.
Disclosed deal value plunged 48% in 2011 from the year before to $15.4 billion, although M&A deals in Asian proved relatively resilient — exceeding, at 31% of total deals, the shares of North American and European deals for the first time in a PwC survey. North America accounted for 27% of total deals and Europe, 25%.
In a telephone interview, Sam Yildirim, U.S. asset management M&A leader with PwC, said Asia-related deals could continue to pick up speed in 2012, but with European divestments likely to drive activity, North American and European-related deals could regain leading shares during the coming year.
A resurgence in volatility could still put a chill on the M&A market, but with management and performance fees under pressure for both traditional managers and alternatives products, and the costs of meeting new regulatory requirements likewise rising, the pressures driving industry consolidation are picking up apace, Ms. Yildirim noted.
