Money manager mergers and acquisitions worldwide increased 32% to 75 in the first six months of 2013, with twice as many deals involving firms with $10 billion in assets under management than in the first half of 2012, according to a Freeman & Co. report issued Monday.
The deals in the first half of the year represented $1.2 trillion of AUM, an increase of 156% from a year earlier. For all of 2012, transactions involved $1.4 trillion in AUM, according to the Freeman report. Twenty deals in the first six months of 2013 involved more than $10 billion in AUM, compared with 10 in the same time period a year ago.
In the U.S., there were 42 transactions in the first six months, up 31% from the first half of 2012; the 29 transactions in Europe was an increase of 71%. For the rest of 2013, Freeman executives expect a similar amount of money manager M&A deals, projecting the 2013 total will be 150. That would be a 9.5% increase from the 137 transactions last year.
“Institutional investors are changing the ways in which they allocate to alternatives,” according to the Freeman report. “However, to date, few managers have robust capabilities to manage separate accounts across the entire spectrum. In 2013, we expect to see growing M&A activity in the illiquid space, such as private equity and real estate, as larger franchises seek to expand their allocation capabilities in these areas and smaller, independent business models feel pressure in expanding distribution.”
Still, private equity transactions involving financial institutions in the first six months of the year totaled 39, down 38% from the first half of last year, with total transaction value of $6.9 billion, down 59% from a year earlier.
“As private equity deal activity has been healthier in sectors other than financial services, we expect full year 2013 private equity financial institutions group acquisitions to be much closer to 2012 levels than annualized numbers would suggest,” according to the report.