M&A Deal Flow Surges Higher - Refinitiv
(05 November 2021 – United Kingdom) The first three quarters of 2021 saw more sub US$1 billion deals between asset managers than at any other time since the 2007 Global Financial Crisis (GFC) according to Refinitiv.
CFOs are viewing mergers as a rapid fire method for gaining scale and meeting changing regulatory and customer needs. A number of drivers for consolidation are holding sway including increased regulatory pressure from MiFID 11 implementation, growing pressure on fees and rising digital, innovation and technology costs.
Asset managers could also acquire FinTechs to modernise their digital infrastructure and upgrade their service offerings so they can improve customer retention and new customer acquisition. In its Global M&A Report 2021, Bain & Company forecasts that more traditional active managers will partner for scale to fund new capabilities such as ESG and boost distribution.
“I predict that we will see a number of medium-sized asset managers getting snapped up by larger groups or doing mergers of equals to reach higher levels of assets under management and to secure exclusive access to new customer groups via strategic distribution agreements. Higher assets under management may also help the respective asset manager to maintain its revenue since the pressure on margins in the asset management industry is increasing and will continue to do so in the future” commented Refinitiv Head of EMEA Research, Detlef Glow.
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