“I think you'll see a 'boomlet' in mergers-and-acquisition activity over the next 12 months,” said Ben F. Phillips, partner at Casey Quirk & Associates, a consultancy that advises on asset management deals. “The pricing gap between bidders and askers has narrowed.”
In a deal that analysts said makes TIAA-CREF a more feasible competitor to top-tier mutual fund companies like The Vanguard Group Inc. and Fidelity Investments, the money manager said April 14 that it had agreed to acquire Nuveen for $6.25 billion from a group led by private equity firm Madison Dearborn Partners.
The acquisition is the largest transaction in the asset management business since 2009, when BlackRock Inc. acquired Barclays Global Investors and the iShares exchange-traded funds in a deal valued at $13.5 billion.
The Nuveen acquisition was not the only deal of the week. On April 16, Victory Capital Holdings Inc. said it had agreed to acquire Munder Capital Management in an all-cash deal, creating a firm with $37 billion in assets, including $16.5 billion in house-brand mutual funds. Funds managed by private equity firm Crestview Partners are among the investors financing the deal. Terms were not disclosed
Money manager mergers and acquisition activity in the first quarter was flat from the previous quarter — with total assets in transactions standing at $305.5 billion — but down more than 55% from the first quarter of 2013, according to Pensions & Investments' Research Center.