Fri, Jul 25, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Jefferies forecasts independent firms will shape 2010 asset management M&A as mega-deals, divestitures should subside

Thursday, January 07, 2010
Opalesque Industry Upates – M&A in the global asset management industry in 2009 was dominated by mega-deals, with a record nine transactions announced involving firms with more than $100 billion in assets under management. Yet several deals in the fourth quarter signal a new phase driven by a greater number of transactions primarily involving independent firms, according to the Financial Institutions Group of Jefferies & Company, Inc.

While 60% of Q4 2009 asset management M&A represented divestitures – the defining theme in the past year – significant strategic deals involving independent firms such as Advisory Research’s sale to Piper Jaffray and Metropolitan West Asset Management’s purchase by TCW will help determine dealmaking activity in 2010, according to Jefferies. This would mark a significant change from 2009, when only 61 independently-owned managers changed hands, the lowest level in more than a decade, and 57% below the previous year’s tally.

‘’We expect divestitures to continue to play out through the first half of 2010 when the urgency of capital raising and strategic realignment of financial institutions should taper off,’’ said Aaron Dorr, a New York-based managing director within Jefferies’ Financial Institutions Group. ‘’We also anticipate aging owners of independent firms who missed the last bull market to seek to transact in 2010 given improving market conditions, asset flows and pricing.’’

Deal volume in the October to December 2009 period totaled 30, compared with 45 announced transactions in the fourth quarter of 2008. Managed assets transacted fell to $522 billion from $638 billion a year earlier. However, disclosed deal value jumped to $6.5 billion from $4.0 billion in the fourth quarter of 2008 – led by the Deutsche Bank/Sal. Oppenheim and Invesco/Van Kampen transactions. The median deal value was $156 million, compared with a median $38 million in the fourth quarter of 2008.

For all of 2009, deal volume declined to 143 against 219 in 2008. Yet an all-time high $4.0 trillion in assets under management changed hands, 51% ahead of the total in 2006, the previous record year. By contrast, the 2008 tally was $1.95 trillion in assets transacted. Total disclosed deal value in 2009 was $24.9 billion, up substantially from the previous year’s $15.9 billion.

The largest global asset management transactions announced in the fourth quarter of 2009, by assets under management, were:

  • Deutsche Bank’s acquisition of Sal. Oppenheim, announced in October 2009 ($201 billion)
  • Invesco’s purchase of Morgan Stanley’s retail asset management business, including Van Kampen Investments, announced in October 2009 ($119 billion)
  • Gartmore Group’s initial public offering in December 2009 ($35 billion)
  • Apax Partners’ acquisition of Psagot Investment House, announced in December 2009 ($32 billion)
  • TCW Group’s purchase of Metropolitan West Asset Management, announced in December 2009 ($30 billion)
The largest global asset management transactions announced in the fourth quarter of 2009, by disclosed deal value, were:

  • Deutsche Bank’s acquisition of Sal. Oppenheim, announced in October 2009 ($1.9 billion)
  • Invesco’s purchase of Morgan Stanley’s retail asset management business, including Van Kampen Investments, announced in October 2009 ($1.5 billion)
  • Apax Partners’ acquisition of Psagot Investment House, announced in December 2009 ($620 million)
  • Gartmore Group’s initial public offering in December 2009 ($553 million of proceeds)
  • Julius Baer Group’s purchase of ING Bank (Switzerland), announced in October 2009 ($506 million)
The biggest deals for all of 2009, by assets under management, were:

  • BlackRock’s purchase of Barclays Global Investors, announced in June 2009 ($1.44 trillion)
  • Crédit Agricole Asset Management combining with Société Générale Asset Management to form Amundi Asset Management (to be owned 75% by Crédit Agricole and 25% by Société Générale), announced in January 2009 ($839 billion combined AUM)
  • Deutsche Bank’s acquisition of Sal. Oppenheim, announced in October 2009 ($201 billion)
  • Ameriprise Financial’s acquisition of the long-term asset management business of Bank of America’s Columbia Management, announced in September 2009 ($165 billion)
  • Bank of New York Mellon’s purchase of Insight Investment Management from Lloyds Banking Group, announced in August 2009 ($132 billion)
The biggest deals for all of 2009, by disclosed deal value, were:

  • BlackRock’s purchase of Barclays Global Investors, announced in June 2009 ($13.5 billion)
  • Deutsche Bank’s acquisition of Sal. Oppenheim, announced in October 2009 ($1.9 billion)
  • Invesco’s purchase of Morgan Stanley’s retail asset management business, including Van Kampen Investments, announced in October 2009 ($1.5 billion)
  • Ameriprise Financial’s acquisition of the long-term asset management business of Bank of America’s Columbia Management, announced in September 2009 ($1.0 billion)
  • Sumitomo Trust & Banking’s purchase of Citigroup’s Nikko Asset Management business, announced in July 2009 ($844 million)

Jefferies, a major global securities and investment banking firm, has served companies and their investors for more than 45 years. Jefferies & Company, Inc. is the principal US operating subsidiary of Jefferies Group, Inc. (NYSE: JEF: jefferies.com), and Jefferies International Limited is the principal UK operating subsidiary. Jefferies International Limited, a UK-incorporated company, is authorised and regulated by the UK Financial Services Authority.


Be

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. Events – AIMA Australian Hedge Fund Forum, Sept. 16, Sydney[more]

    AIMA Australia invite you to join us at our annual Hedge Fund Forum on Tuesday 16th September 2014 at the Sofitel Sydney Wentworth. The AIMA Australian Hedge Fund Forum is a non-profit hedge fund conference organised by the industry for the industry, featuring quality Australian and internation

  2. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  3. Opalesque Exclusive: Loeb, Grantham cite growing economic concerns in letters[more]

    Bailey McCann, Opalesque New York: Hedge fund manager Daniel Loeb, head of Third Point, and Jeremy Grantham of Grantham, Mayo, Van Otterloo & Co. have both released their quarterly investor letters today. While news is positive on some fronts, and both men see pockets of opportunity, they also h

  4. Investing – Hedge funds expect Netflix earnings to catapult forward, Third Point's Loeb takes stakes in Fibra Uno, YPF, Royal DSM, Lake Capital in talks to back Engine Group[more]

    Hedge funds expect Netflix earnings to catapult forward From Investing.com: Netflix has made major strides forward in 2014 despite ongoing battles with the FCC and cable companies over the issue of net neutrality. The FCC has now received over 500,000 comments from the public on its pend

  5. Opalesque Roundtable: European family offices struggle to retain their investments in offshore hedge funds[more]

    Komfie Manalo, Opalesque Asia: The European Union’s Alternative Investment Fund Managers Directive (AIFMD) will constrain investment opportunities amidst concern a number of U.S. fund managers will stop marketing their products in the European Union under the new rule, said Valentin Bohländer fro