Prudential’s asset management unit is on the deal trail.
PGIM is talking to several firms about potential acquisitions, David Hunt, CEO of the business that manages more than $1 trillion, said in an interview in New York. The company is interested in buying bolt-on units that would expand offerings in areas such as private credit, real assets or non-U.S. businesses, rather than large-scale acquisitions, he said.
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The company is evaluating ways to package both its quantitative and active strategies into the funds, according to a person familiar with the matter.
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The acquisition is expected to provide access to a wide range of smart beta products.
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Almost all young investors polled by Schwab expect the funds to be their primary investment vehicle in the future.
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"We’re definitely in active discussions now," Hunt said. “We’re working on a portfolio of things. I’d be surprised if some of them don’t hit in the next 12 to 18 months.”
Asset managers globally have been eyeing mergers as a way to reduce costs, broaden their product mix and expand geographically as the industry faces pressure on fees. An eventual economic slowdown could trigger more asset management deals, as disagreements on valuations have so far held back transactions, Hunt said.
"There has not yet been enough of a meeting of minds on price," Hunt said. "What would change that dynamic? I think the answer to that is a good old-fashioned downturn. And until we get to that, I think we’ll stagger along with a few deals that happen, but not in the magnitude that industry economics should deserve."
In November, PGIM announced an acquisition of Wadhwani Asset Management, a quantitative macro investment manager in London.
