Thu, Feb 23, 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. People - Kuwait wealth fund head Al Saad said to step down after 14 years[more]

    From Bloomberg.com: Kuwait Investment Authority is set to name Farouk Bastaki as managing director, replacing Bader Al Saad who ran the world's fifth-largest sovereign wealth fund for 14 years, a person familiar with the matter said. The KIA, as the fund is known, is finalizing the appointment, said

  2. Manager Profile - Eddie Lampert: a painful entanglement with Sears[more]

    From Moneyweek.com: "In the long run we are all dead." Lex in the Financial Times reached for the famous quote from John Maynard Keynes in January when, after a long and unforgiving decline, the clock finally appeared to be running out on Sears, the iconic US department store group. Yet the group's

  3. Investing - Hedge funds quit Aberdeen shorts as shares begin to recover, Hedge funds' next big short: U.S. malls, O'Connor fund owns 9.5% of Protalix Biotherapeutics, U.S. hedge fund takes position in Macau hotel The 13[more]

    Hedge funds quit Aberdeen shorts as shares begin to recover From Investmentweek.co.uk: The last two hedge funds to short Aberdeen Asset Management have removed their positions, as the fund group's shares begin to show signs of recovery after a difficult few years. According to the Financ

  4. Latin America, high yields and Asia Pacific strategies dominate hedge fund returns in January[more]

    Komfie Manalo, Opalesque Asia: Latin America (+7.04%), high yield (5.63%), and Asia-Pacific (+5.06%) strategies dominated hedge fund performance in January, data provider Hennesee Fund Research said. The bottom three strategies for the mont

  5. Investing - Hedge funds loading up on this dividend stock, The biggest hedge funds have been piling into bank stocks[more]

    Hedge funds loading up on this dividend stock From Incomeinvestors.com: Hedge funds are backing up the truck on Cameco Corp stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans - including Ray Dalio, Ken Griffin, and Chuck Royce - have been quietly building positio