Volcker Rule, Consolidation Pressure Boost Alts. Deals

Sep 13 2010 | 11:37am ET

With (more than) a little help from the newly-enacted Volcker rule, 2010 will likely see more deals involving alternative investment firms that traditional asset management firms for the first time.

There were 52 alternative asset manager deals in the first half, according to Freeman & Co. That’s more than double the number of such deals seen in the first half of last year, putting the industry on pace to see more than 100 alternatives deals.

By contrast, traditional asset managers are on pace for only 70 to 75 transactions.

The big boost in alternatives deals is the result both of regulatory pressure—the new U.S. banking regulations strictly limit banks’ participation in the alternatives space—and a continuing effect of the financial crisis, which has spurred consolidation in the industry, Freeman said.

“You have a fund that’s gone from $2 billion to $1 billion, and they are like, ‘Wow, maybe we should think about partnering,’” Eric Weber, Freeman’s chief operating officer, told Reuters.

But while the financial crisis may be pushing firms to consolidate, it is also pushing down the amount of money such firms manage. Deals in the first half amounted to only $417 billion in assets under management, down from $2.7 trillion in the first half of 2009.


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Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

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