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Laxman Pai, Opalesque Asia: Asset and wealth management (AWM) deals to stay hot in the second half of 2020 as the last twelve months have marked a banner period, said a study.
According to quarterly deals insights by PWC, deal volume hit a high-water mark relative to the past few years. Similarly, the value of announced deals hit $53.4bn, a new record.
Morgan Stanley was behind two of the largest deals this year: the $13.1 billion acquisition of E*TRADE Financial Corp. and a proposed $6.8 billion acquisition of investment manager Eaton Vance. But smaller-scale consolidation across the industry was also robust. In all, we saw 220 announced deals during the period, up slightly from the 212 announced deals in 2019.
"We expect the strong pace of deal activity to continue into 2021. However, the impetus for transactions has already begun to shift," the report said.
Many deals in 2020 were led by more traditional drivers of cost-cutting and economies of scale, as firms looked for ways to cope with fee compression.
"Looking forward, we see more desire by some to expand capabilities, products, and distribution. This, along with middle-market companies that may struggle to differentiate themselves in a crowded market, could be a prelude to future AWM dealmaking," it added.
According to the report, the investment thesis for asset management transactions has often depended on the ability to reduce costs upon integration. But in several recent asset management d...................... To view our full article Click here
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