Mon, May 25, 2015
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. Comment - Top hedge fund managers talk about how easy their jobs have gotten, BlackRock to Schroders warn of Argentina’s $20bn bond glut, The 35-year “investment supercycle” is drawing to a close, says Bill Gross, Gundlach: When the Fed starts hiking rates, 'GET OUT' of this asset class[more]

    Top hedge fund managers talk about how easy their jobs have gotten From Businessinsider.com.au: Time was, before the financial crisis hit, corporate boards treated multi-billion dollar hedge fund managers like Jehovah’s Witnesses pounding on their doors and flashing bibles. But no more.

  2. T Rowe's challenge to Dell deal may fuel critics of 'appraisal'[more]

    From Reuters.com: An increasingly popular tactic used by hedge funds and others to extract more money from buyouts could soon face a major courtroom test when a big investor in Dell Inc may argue that it should be paid a higher price for the 2013 acquisition of the PC maker. The strategy, known as "

  3. News Briefs - Ergen says LightSquared plan unfairly favors hedge funds, Why hedge fund managers make good advisory clients, I learned a lot about dad-bros after spending 4 days in Vegas with 2,000 hedge funders[more]

    Ergen says LightSquared plan unfairly favors hedge funds LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Corp. Chairman Charles Ergen said in

  4. Opalesque Exclusive: SEC approves proposed changes to Form ADV, '40 Act - comment period to follow[more]

    Bailey McCann, Opalesque New York: Hedge funds and providers of liquid alternatives will want to pay close attention to proposed reforms approved by the SEC yesterday. The changes will require more frequent reporting, as well as a closer look into social media, liquid alternative strategies, and

  5. New market regime has created more dispersion between managers[more]

    Komfie Manalo, Opalesque Asia: The month of April has marked the transition toward a new market regime, Philippe Ferreira, Lyxor AM’s head of research, managed account platform, commented in the May 5's Weekly Briefing. "The first quart

 

banner