Sun, Oct 22, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Alternative and niche asset managers to drive 2012 global M&A: Cerulli

Wednesday, March 07, 2012
Opalesque Industry Update - As global managers seek to supplement existing capabilities, 2012 M&A activity will center on managers of alternative strategies.

Increasingly, managers are looking for niche sales opportunities and this means it is likely that merger and acquisition (M&A) activity in 2012 will be most active when it comes to managers of alternative strategies.

"Despite an optimistic start, overall, deal values were subdued in 2011, reflecting market volatility and uncertainty, particularly in the second half of the year," said Barbara Wall, director at Cerulli Associates. "The aggregate transaction value amounted to US$17.3 billion last year, some 5% lower than the value in 2010."

The decline in the value of M&A transactions in 2011 reflects a general trend of M&A activity in niche areas, such as alternatives (with lower deal values) where managers sought to supplement existing capabilities. There were two major themes affecting the global asset management M&A landscape last year. First, regulatory and economic uncertainty brought about high failure rates and long lead times. Second, divestitures of unique or small asset classes resulted in increasing deal activity among smaller managers.

Although traditional manager deals returned in 2011, alternatives transactions are likely to increase again in the near future. Not only divestitures from large banks, but also the perceived growth opportunities for alternatives from increased allocations to this asset class-particularly by institutional investors-will be the underlying drivers of acquisition interest in alternatives (despite redemptions by high-net-worth investors disappointed by lack-luster returns). Another major driver in this area is enhanced distribution opportunities in Europe and Asia through undertakings for collective investments in transferable securities (UCITS) III offerings.

Exchange-traded funds (ETF) providers, whose products continue to increase in popularity, could also become acquisition targets this year. Although independent ETF providers have attracted the attention of sponsors and strategic acquirers alike, only a few transactions have been completed to date, as most independent firms choose to pursue growth independently. Nevertheless, large firms may need to buy their way into this market-which is highly concentrated among top players that benefit from first mover advantage, product placement, and scale-while independent ETF providers may be tempted to explore options with sponsors willing to pay for growth.

"Overall, I expect that M&A deal sizes in the asset management industry will be more at the medium and small end of the scale this year (that is, in the less than US$1 billion AUM range)," said Wall.

These findings and more are from The Cerulli Edge - Global Edition, March 2012 issue. CLICK HERE to request a press copy of this research.


Headquartered in Boston with offices in London and Singapore, Cerulli Associates provides financial institutions with guidance in strategic positioning and new business development. Our analysts blend industry knowledge, original research, and data analysis to bring perspective to current market conditions and forecasts for future developments.

BG

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. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad