There were 50 reported M&A deals valued at $26 billion within the money management industry during the fourth quarter, making 2019 a record year, research from PricewaterhouseCoopers shows.
The deals resulted in 212 recorded transactions totaling $41.6 billion in all of 2019, according to the firm's research, released Thursday. The disclosed deal value for 2019 was more than twice the level PwC recorded in 2018.
"The (asset and wealth management) sector continues to consolidate, driven partly by the stark fact that AUM has shrunk at 30% of mutual fund managers during the past five years," Greg McGahan, U.S. AWM deals leader at PwC said in the research note. "We estimate that by 2025, at least 20% of fund managers will be acquired or eliminated."
With continued fee pressure, declining AUM at several firms, and increased consolidation of money managers and insurance companies, PwC expects the forward momentum of M&A deal-making to continue in 2020.
"Asset and wealth executives are busy trying to solve an array of problems," the research report said. "The big question is what comes next? The next wave of transformation will probably sweep across the mutual fund industry. Mutual funds will need to act decisively in order to remain competitive and relevant. Their actions are sure to drive deal activity in the months to come."
PwC singled out Charles Schwab Corp.'s acquisition of TD Ameritrade Holding Corp. for $26 billion in November as one of the notable deals for the quarter.