Mergers and acquisitions among asset management firms will remain high in the second half of the year, according to
In the first half of the year, there were 114 M&A deals valued at $33.7 billion, with the acquired firms having $1.24 trillion in assets under management. That’s a 31% increase in the number of deals from the first six months of 2006, when there were 87 such transactions. And the value of the deals increased 142%, from $13.9 billion a year ago.
Throughout all of 2006, there were 191 asset management deals valued at $2.6 billion, with $44 billion in assets under management.
Many of the deals in the first half of this year, 30%, were for alternative asset managers, and private equity firms were particularly active, accounting for 25% of all assets acquired.
Buyers paid an average 11.9 times EBITDA, the highest in 18 months.
“We expect asset management M&A activity to stay vigorous as demographic and globalization trends remain favorable,” said Ben Phillips, managing director and head of strategic analysis at Putnam Lovell. “Moreover, a turbulent market will test alternative managers as never before. Transactions involving alternative managers that blend strategy and liquidity will result in successful deals that deserve premium pricing.”