With the recent market rebound, investment-banking executives believe asset managers will be exploring new acquisitions, Reuters reports. However, these new transactions arent likely to be complete buyouts or large takeovers but acquisitions of specific business areas, also known as lift-outs.
"The whole theme is much more focused acquisitions," Mike McKeon, managing partner at consulting firm Booz Allen Hamilton, told Reuters.
This idea of a lift-out seeks to take a portion of a firm that the buyer seeks to strengthen in its own firm, without necessarily having to acquire the entire firm, which can bring about a level of operational redundancy. For example, a company can add a portfolio management team for a specific investing style.
The largest mutual fund industry deal in months was American Express announcement last week that it will purchase Threadneedle from Zurich Financial Services for $570 million. The largest deal in 2002 was Man Groups acquisition of RMF Management Group for $833 million.
Around 40% of asset management deals last year with divestitures, with owners selling off part of their firms.