Tue, Sep 27, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Alternative manager M&A to outpace traditional manager deals for first time due to Volcker Rule - Freeman & Co

Monday, September 13, 2010
Opalesque Industry Update - Freeman & Co., an independent advisor to the financial services industry, released the latest edition of its asset management industry overview including data on M&A and deal activity. Freeman & Co. projects that in 2010 alternative manager deals will outpace traditional manager deals for the first time.

Through June 30, 2010, alternative asset manager deals were up 108% to 52 transactions YTD compared to 25 transactions in the same period last year. Alternative manager deals should exceed 100 in 2010, with acceleration in the second half due to pressures from the “Volcker rule” and other international regulatory initiatives. In contrast, traditional manager deals totaled 31 deals during the first six months of 2010 and may only reach 70-75 transactions in 2010.

“With alternative manager deals set to outpace traditional manager deals for the first time in 2010, we have seen the full maturation of the alternative industry. Alternatives are a necessary part of any sophisticated investor’s portfolio, so financial services companies have to address this need.” says Eric Weber, Managing Director and COO at Freeman & Co. LLC.

The report also reviews current industry trends including a review of how financial regulatory reform and the “Volcker Rule” are acting as a catalyst for alternative manager deals as well as the rise in prominence of UCITS as a product packaging solution for hedge fund distribution in Europe.

In summary, the report details the following
· Deal Activity / M&A: The number of transactions increased to 106 in 1H 2010 versus 87 in 1H 2009, a 22% increase. Total AUM involved was $417 billion. Average deal AUM size dropped from $36.9 to $5.5 billion. Deals with alternative asset managers increased to 52 in 1H 2010 from 25 in 1H 2009, a 108% increase, as the need for size, scale and distribution continue to drive M&A.

· Alternatives: M&A activity in the alternative sector is on pace to exceed 2008 and 2009 levels as firms consolidate, get acquired by larger strategic firms or are spun-out by banks facing regulatory issues. As a result, alternative manager deals are on track to outpace traditional manager deals for the first time.

· Financial Regulatory Reform and the “Volcker Rule”: The limitations imposed on proprietary trading and PE / HF sponsorships already have caused global reevaluation of the diversified bank business model, with Citigroup and Bank of America selling PE / HF business units.

· UCITS: UCITS III hedge fund sector now takes up 7% of the total HF industry. There is no sign of its growth slowing. We see an increase in its use by non-European firms who wish to access the European capital markets.

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Star names struggle as smaller hedge funds make hay[more]

    From eFinancialnews.com: Many big-name funds have been hit by sharp reversals in markets, including US government bonds and UK stocks, and have struggled to extricate themselves from positions that have gone bad. According to data group eVestment, hedge funds below $250 million in size are up 4.1% t

  2. North America - Acela fight splits hedge fund Connecticut and old money enclaves[more]

    From Bloomberg.com: Connecticut’s residential coastline is two worlds, the one of newcomer millionaires and one whose wealth and New England roots span generations. Now, their differences over a rail route threaten to gum up plans for the U.S. Northeast’s fastest-ever trains. About 30 miles from Man

  3. Activist News - Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership, Activist investors double chance of CEO exits[more]

    Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership From Calvinayre.com: Casino operator Caesars Entertainment has improved its offer to junior creditors to over $5b, but the offer is only good until Friday. On Wednesday, Caesars added an extra $1.6b to the $

  4. Nobel Sustainability Trust, Prince Albert II of Monaco help launch major new initiative to drive sustainable technologies[more]

    Matthias Knab, Opalesque: The Nobel Sustainability® Trust ("NST") is leading a major new initiative to finance, incubate and accelerate the development of clean technologies. The initiative will start with the formation of the Nobel Sustainability Fund® ("NSF"). NSF will drive faster access t

  5. Comment - ‘Gut feeling’ measurable in hedge fund traders, How hedge fund managers can use blockchain to maximize benefits[more]

    ‘Gut feeling’ measurable in hedge fund traders From Laboratoryequipment.com: “Gut feeling” is an intangible – an automatic hunch – based on prior experience for some people. But the “gut feeling” is actually a measurable response developed in professionals doing some high-risk work, acco