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Despite expectations for consolidation across the sector, transactions among asset managers in 2023 fell to their lowest level in six years.
According to the data provided in financial news According to London Stock Exchange Group, 865 asset management M&A deals were completed globally last year, a 25% decrease compared to 2022.
Last year’s figure was the lowest since 2017, when 792 deals were announced.
Despite forecasts that fund groups will continue to seek to build scale and expertise in new markets through acquisitions, the number of global deals has steadily declined since 2021, with more than 1,200 transactions expected in 2021. Transactions totaling more than $65 billion were completed.
The fall in activity was particularly noticeable in the UK last year, with 131 wealth management transactions taking place, down 32% from a record high of 194 in 2022.
Lucille Jones, senior manager at LSEG Deals Intelligence, said 2022 was a strong year for UK trading activity, with 88% of deal value concentrated in the first six months.
read European fund executives predict a new surge in M&A
But then the pace slowed, she said.
“Macroeconomic and geopolitical headwinds continue to dampen deal appetite in 2023, with UK asset management deal numbers hitting their lowest in 10 quarters in the first quarter,” Jones said.
The number of UK deals last year was the lowest since 2020, when 109 acquisitions of asset managers took place amid the start of the coronavirus pandemic.
Despite the decline in deal numbers, 2023 saw some notable deals announced involving UK fund management groups. These included Assetco’s sale of ETF provider Rise to US-based Ark Invest and Premier Mitten’s acquisition of equity boutique Tellworth.
Meanwhile, UK-based Lansdowne Partners announced it would acquire Clax Asset Management, while Man Group said it would acquire a controlling stake in Valagon Capital as part of its foray into private credit. .
The number of deals for fund managers also fell across the continent, with 149 deals completed in 2023, down 32% from the previous year.
Global asset management M&A deals completed in 2023 decreased, but deal value increased 8% year-on-year to $49.7 billion.
The figures were announced amid growing expectations that asset managers will need to push ahead with M&A deals to counter headwinds such as continued capital outflows, fee pressures and rising costs of doing business.
A study published by PwC in June found that almost three-quarters of global asset managers will seek to gain access to new market segments, reduce competition and reduce risk over the next two years. It has been revealed that the two companies are considering a merger.
BlackRock CEO Larry Fink said in October that the world’s largest asset manager was targeting more “transformative” M&A deals that expand its technology and private market capabilities, analysts said. , adding that the company is “engaging in more discussions than ever before.” “For many years”.
To contact the author of this article with feedback or news, email David Ricketts.
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