Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Should Stromberg Do a $5B Deal? Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 17, 2018

Should Stromberg Do a $5B Deal?

News summary by MFWire's editors

Bill Stromberg may be on the hunt for a multi-billion-dollar acquisition, at least if some T. Rowe Price-watching [profile] analysts get their wish.

Yesterday, in a research note entitled "Better Late than Never - Upgrading to Outperform," Credit Suisse research analysts Steven Castano, Ari Ghosh, and Craig Siegenthaler argue that it's time for Stromberg, CEO of publicly traded T. Rowe (TROW), to consider deploying between $2 billion and $5 billion to make "large acquisition," perhaps to jumpstart growth in the Baltimore-based asset manager's "small European and Asian business."

The Baltimore Business Journal and Benzinga picked up on the Credit Suisse note.

"We think TROW can transport its success in actives/traditionals in the US to Europe and Asia, and a deal would significantly speed-up its effort," the Credit Suisse analysts write.

T. Rowe's market cap is currently $29.46 billion and, as the Credit Suisse analysts note, it has a "debt-free balance sheet" and more than $2 billion of excess capital. At traditional asset manager multiples of between one percent and four percent AUM, deploying up to $5 billion in capital could translate into T. Rowe buying a manager with up to $500 billion in AUM. The report does not mention possible T. Rowe acquisition targets.

This is not the first time that analysts and fundsters have pointed to T. Rowe as a potential acquirer. Yet at least as far back as 2009, T. Rowe watchers have observed "limited to zero inclination" at T. Rowe when it comes to big acquisitions, and T. Rowe has largely stuck with building out in-house: given that T. Rowe's 6,800-plus employees now have $1.01 trillion in AUM (as of March 31, 2018), focusing on organic growth seems to have worked well so far.

Yet a deal could boost T. Rowe's distribution efforts overseas. And in the U.S., a deal could launch T. Rowe into two growing spaces it has traditionally shunned: liquid alternatives and passive. Those two categories, as the Credit Suisse analysts point out, are "where most of the new money is migrating in the US." 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use