Notable activity for the first quarter of 2020 included Franklin Resources Inc.’s acquisition of money manager Legg Mason for $4.5 billion, creating a firm with $1.5 trillion in assets under management. The combined Franklin Templeton, using year-end 2018 figures, would have moved to 10th from 24th in P&I’s 2019 money manager ranking. Though the financial markets seemed to be resilient against the potential impact from COVID-19 in January and February, the financial markets priced in significant fallout from COVID-19 in March. Franklin Resources could have theoretically paid $1.25 billion less if the acquisition took place in March instead of February, or Franklin Resources might not be interested in the deal at all amid uncertainty of the financial outlooks.
Two notable non-money manager deals for the quarter included Morgan Stanley’s $13 billion purchase of discount brokerage E-Trade Financial Corp. as well as the merge between Aon and Willis Towers Watson. The all-stock takeover would add E-Trade’s $360 billion of client assets to Morgan Stanley’s $2.7 trillion and is considered as the biggest acquisition by a Wall Street firm since the financial crisis. Aon shareholders would own about 63% and Willis Towers Watson shareholders would own 37% of the combined firm after the deal closes.
Nine money management deals took place in the first quarter of 2020, a 40% decrease from the previous quarter, and no M&A deal took place in March. In the first quarter of 2019, there were 16 transactions. Assets under management involved in the transactions totaled $889.8 billion, down 35% from $1.36 trillion in the previous quarter and an increase of 468% from the same period a year ago. There also were 13 deals in the quarter that did not involve money managers.
Jupiter Fund Management announced it will acquire Merian Global Investors for £370 million ($476.5 million) to boost its fixed-income and emerging markets capabilities. Amundi agreed to acquire a 100% stake in Sabadell Asset Management for €430 million ($478 million) from Spanish bank Banco Sabadell Group. DiMeo Schneider & Associates agreed to acquire Fiduciary Investment Advisors, which has $84 billion in assets under advisement. OneDigital made multiple acquisitions with a total of $41 billion in assets under advisement added to its platform. UBS Group agreed to sell a 51% stake in its fund distribution platform to Clearstream for 389 million Swiss francs ($399.6 million).
All information is based on transactions reported by Pensions & Investments’ global reporting staff.