The Coming Rationalization? Financial institutions parting ways with their asset management businesses
Sep 3rd, 2009 | Filed under: Institutional Investing, Today's PostBy: Michael Newman, CAIA, AllAboutAlpha.com Editorial Board
In its semi-annual report on the Asset Management and Capital Markets businesses, M&A specialist Jeffries Putnam Lovell highlighted the continued increase in divestitures as a percentage of overall M&A activity affecting the asset management business. Traditionally, independent buyers and sellers tend to dominate deal activity, but as the report makes clear in numerous charts and tables, divestitures and strategic acquisitions by pure play asset managers have been the primary deal makers as of late. In doing so, the report raises important questions about the future of the asset management industry and alternative investment managers in particular.
Overall Environment:
The report begins by detailing the dearth of deal activity, which is still significantly below 2008’s already muted levels, by most measures. As the chart below highlights, transaction activity, as measured by deal value or number of transactions is down significantly.
Outliers:
The report is also quick to remind us that these already low figures are themselves markedly distorted by two major outliers: the Barclays Global Investors deal and the Société Générale deal. Without these two mega-deals, deal value would have been a pittance as would ‘transacted AUM’ (highlighted in the chart below): More…
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[...] September 15, 2009 Goldman Hedge Fund Report: More Consolidation Ahead – Seeking Alpha Posted by Michael Lockrow under Hedge Fund, Outside articles, Uncategorized | Tags: Distressed, Equity, Hedge Funds, Investor, Long-Short, Macro, Multi-strategy | Leave a Comment SeekingAlpha commentary by Christopher Holt : The one trend market pundits seem to collectively be predicting with ease for the hedge fund industry is so-called consolidation. [...]