Asset Manager M&A Climbs Amid Financial Crisis

Oct 7 2008 | 11:54am ET

Deals involving asset managers rose during the third quarter, with the global credit crunch serving as the backdrop for a jump in divestitures to almost 40% of total sales, up from 23% a year earlier.

According to data from Jefferies Putnam Lovell, 69 asset manager transactions worldwide were announced in between July and September, 33% above the 52 in the same period last year. Total assets under management changing hands amounted to $1 trillion, more than three times the $300 billion total in the third quarter of 2007. Total disclosed deal value in the third quarter of 2008 increased to $6.4 billion from $6.1 billion a year earlier.

“As we anticipated, tremors transforming the global financial landscape have served as a catalyst to asset management deal flow,” said Aaron Dorr, a New York-based managing director at Jefferies Putnam Lovell. “In the short-term, we expect more banks and other cash strapped financial institutions to retreat from owning money managers, private equity firms to step up their growing involvement in the sector, and consolidation among hedge fund companies and other alternative asset managers as firms grapple with investor redemptions and lack of liquidity.”

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