Money management M&A planned transactions rose 33% to 24 in the first two months of 2013, up from 18 the same time period last year, according to a report from William Blair & Co.
That translates to an implied 36 transactions in the first quarter, which would top the 26 in the first quarter of 2012, according to “Investment Services Industry Insights.”
J.P. Young, a director with William Blair's investment banking arm and co-author of the report, expects activity to pick up for the rest of the year. Mr. Young said more than 100 transactions in a year is considered a good year and that 2013 is “tracking nicely in the number of completed transactions.”
“It's a function of improved confidence, improved lending opportunities and general improved performance,” Mr. Young said in a telephone interview.
Mr. Young expects large firms and private equity companies to make the bulk of acquisitions, largely in middle- and small-market transactions. The report states further consolidation in the industry is likely as there is a set of potential acquirers that have strong balance sheets and are earning low returns on cash.
“In addition, many firms continue to face succession plan and generational situations within their own organizations and, as a result, are increasingly open to considering a financial partner,” according to the report.
Through Feb. 28, five transactions have been disclosed with an average deal size of $114.1 million. The largest transaction was Aberdeen Asset Management's planned acquisition of Artio Global Investors announced in February.
The combined assets under management of the 18 acquired companies with disclosed values totaled $69.3 billion, down 14.5% from the same period last year.