M&A in the investment management industry has skyrocketed this year, even with the turmoil in the markets, according to a new report by Putnam Lovell
. Through mid-November, buyers of asset management firms spent more than $46.7 billion in 208 transactions globally, according to preliminary data. The volume of new deals in expected to continue to climb in the final six weeks of the year and continue to be strong into 2008.
Sales of investment management companies worldwide this year have eclipsed previous records even amid turbulent capital markets, and M&A activity is expected to stay strong in 2008, driven by strategy and necessity, according to Putnam Lovell, the division of Jefferies & Company, Inc. focused on the asset management and financial technology industries.
Through mid-November 2007, buyers of asset management firms spent more than $46.7 billion in 208 transactions globally, according to preliminary data from New York-based Jefferies Putnam Lovell. By contrast, for the full year 2006, there were 192 asset management transactions, and the disclosed and estimated deal value reached $44.1 billion.
In 2007, key trends in asset management dealmaking have been initial public offerings by alternative and traditional firms (seven IPOs thus far this year, representing 15% of total IPO deal value in 2007), and cross-border transactions, which counted for approximately 40% of both the total number of deals announced and of the total amount of assets acquired.
‘’Long-term strategic concerns, amplified by the subprime-related fallout in the financial sector, will continue to stimulate deal flow in asset management during 2008,’’ said Ben Phillips, managing director and head of strategic analysis at Putnam Lovell. ‘’Companies emerging unscathed from the current crisis will seek to press their advantage and expand through acquisitions. Asset managers are the family jewels some financial firms may sell to pay for their credit excesses.’’
With approximately six weeks remaining in 2007, deal volume will continue to climb, but the total amount of assets acquired is likely to fall short of the record total of $2.6 trillion set in 2006, Phillips said. Last year’s total featured the two largest transactions in asset management history – Bank of New York’s acquisition of Mellon Financial and BlackRock’s purchase of Merrill Lynch Investment Managers – totaling $1.5 trillion in managed assets. Through mid-November 2007, the amount of assets acquired totaled $1.8 trillion.
About Jefferies Putnam Lovell
Putnam Lovell, the division of Jefferies & Company, Inc. focused on the financial services industry, offers a wide range of corporate advisory services, including mergers and acquisitions advice and capital raising. Putnam Lovell’s global client base is comprised of diversified financial services firms, institutional and mutual fund managers, alternative investment managers, banks, broker-dealers, insurers, and financial technology firms. Putnam Lovell was founded in 1987 and operates from offices in New York, San Francisco, Boston, and London. Since July 2007, Putnam Lovell has been a division of Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF). For more information please visit www.putnamlovell.com.
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com)
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