The stabilization of valuations, a fragmented asset management market and the attractiveness of minority investment sales influenced merger and acquisition deal activity within the money management industry in 2014, said a report by PricewaterhouseCoopers.
U.S. disclosed deal values reached $12.7 billion in 2014, compared to $2.6 billion in 2013. In 2014, 86 deals in the U.S. were disclosed vs. 84 the year before. The largest recorded deal was TIAA-CREF acquiring Nuveen Investments for $6.25 billion, followed by the London Stock Exchange Group buying Russell Investments for $2.7 billion.Sam Yildirim, U.S. asset management M&A leader at PwC, said in a phone interview that the improvement in overall valuations and the positive outlook in the money management industry were the key drivers for money management mergers and acquisitions in 2014.
“Those were the common denominators across all deals,” she said. “In terms of valuations, 2014 was significantly better than 2013.”
Ms. Yildirim added that there were more growth opportunities within alternatives managers.
Looking ahead to the rest of 2015, PwC is so far seeing a lot of independent management deals in the pipeline. Those deals are larger in terms of number of deals, but smaller in terms of deal values.
“While valuations have improved, we’re seeing that the range of valuations between the low-end to high-end is very wide. This indicates that this market is still very selective,” added Ms. Yildirim.