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.


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note