Fri, Dec 15, 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. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. Launches - Ex-BlueCrest team to open over $200m hedge fund, Greg Coffey, a hedge fund star who retired at 41, is eyeing a comeback, Brevan Howard plans Greek funds as bond rally signals revival[more]

    Ex-BlueCrest team to open over $200m hedge fund From Bloomberg.com: A team of traders who left BlueCrest Capital Management earlier this year raised more than $200 million for their own hedge fund focused on Asian stocks, according to a person familiar with the matter. Ovata Capital Manag

  3. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  4. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  5. ...And Finally - The ongoing gun saga in the U.S.[more]

    From Newsoftheweird.com: As elder members of the First United Methodist Church in Tellico Plains, Tennessee, gathered on Nov. 16 to discuss the recent church shooting in Sutherland Springs, Texas, one of those present asked if anyone had brought a gun to church. One man spoke up and said he c