Despite turmoil in the capital markets, mergers and acquisitions among asset management firms have hit a new record of 208 transactions worth $46.7 billion so far this year, according to Putnam Lovell.
Last year, there were a total of 192 such transactions with a deal value of $44.1 billion.
Cross-border transactions represent 40% of the deals among asset management firms.
“Long-term strategic concerns, amplified by the subprime-related fallout in the financial sector, will continue to stimulate deal flow in asset management during 2008,” said Ben Phillips, managing director and head of strategic analysis at Putnam Lovell. “Companies emerging unscathed from the current crisis will seek to press their advantage and expand through acquisitions,” Phillips added. And among those financial services companies hit with credit woes, they may sell their asset management divisions “to pay for their credit excesses,” he said.
In terms of assets under management acquired, however, 2007 will not exceed the record $2.6 trillion in 2006 due to two of the largest transactions in history, Phillips said. Those were Bank of New York’s acquisition of Mellon Financial and BlackRock’s purchase of Merrill Lynch Investment Managers, which together represented $1.5 trillion in assets.
Through the middle of this month, the amount of assets acquired was $1.8 trillion.