FOR IMMEDIATE DISTRIBUTION
of Asset Management M&A in Q4 2009
Over two-thirds of Q3 2009 global asset management M&A activity – 68% – represented divestitures, a record level in a three-month period, according to Jefferies. Prominent examples include Bank of America's announced sale of the long-term asset management business of its Columbia Management subsidiary to Ameriprise; Bank of New York Mellon's announced acquisition of Insight Investment Management from Lloyds Banking Group; and the purchase by Sumitomo Trust & Banking of Citigroup's 64% interest in Nikko Asset Management. By contrast, divestitures represented 38% of the total deal volume in the third quarter of 2008. Year-to-date through September 2009, divestitures totaled 57% of asset management transactions, a record for a nine-month period, compared with 32% in the year-earlier period.
"As larger financial institutions refocus on strategic strengths, we expect they will continue to separate asset management distribution from manufacturing, keeping the former and seeking solutions for the latter businesses," said Aaron Dorr, a New York-based managing director within Jefferies Financial Institutions Group.
Deal volume in the July to September 2009 period totaled 38, compared with 66 announced transactions in the third quarter of 2008. Managed assets transacted rose to $749 billion from $728 billion a year earlier. Disclosed deal value climbed to $4.5 billion from $4.2 billion in the third quarter of 2008, and the median deal value was $140 million, almost twice the median $73 million in the third quarter of 2008.
For the first nine months of 2009, deal volume totaled 113, compared with 174 in the year-earlier period. Approximately $3 trillion in managed assets transacted year-to-date in 2009, against $1.3 trillion in the first nine months of 2008. Disclosed deal value totaled $18.4 billion thus far in 2009, led by the announced sale of Barclays Global Investors to BlackRock for $13.5 billion. In the first nine months of 2008, disclosed deal value totaled $11.9 billion.
While the number of divestitures is on the rise in 2009, transactions involving alternative asset managers declined, along with cross-border deals. Alternative deals represented 24% of the total in the third quarter of 2009, and 25% for the first nine months. That's down from 27% in the third quarter of 2008 and 33% for the first nine months of 2008. The number of announced cross-border deals fell to 26% in the third quarter of 2009 from 35% in the year-earlier period, and to 19% for year-to-date 2009 from 34% in the first nine months of 2008.
The largest global asset management transactions announced in the third quarter of 2009, by assets under management, were:
Ameriprise Financial's acquisition of the long-term asset management business of Bank of America's Columbia Management ($165 billion AUM).
Bank of New York Mellon's purchase of Insight Investment Management from Lloyds Banking Group ($132 billion AUM).
Macquarie Group's acquisition of Delaware Management from Lincoln Financial ($125 billion AUM).
Sumitomo Trust & Banking's purchase of Citigroup's 64% interest in Nikko Asset Management ($93 billion AUM).
Pacific Century's acquisition of AIG's asset management business ($89 billion AUM).
The largest global asset management transactions announced in the third quarter of 2009, by disclosed deal value, were:
Ameriprise Financial's acquisition of the long-term asset management business of Bank of America's Columbia Management ($1 billion).
Sumitomo Trust & Banking's purchase of Citigroup's 64% interest in Nikko Asset Management ($844 million).
Artio Global Investors' IPO ($650 million)
Pacific Century's acquisition of AIG's asset management business ($500 million).
Macquarie Group's acquisition of Delaware Management from Lincoln Financial ($428 million).
About Jefferies
Jefferies, a major global securities and investment banking group, has served companies and their investors for more than 45 years. Headquartered in New York City, with offices in more than 25 cities around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF: www.jefferies.com). Jefferies International Limited, a UK-incorporated, wholly owned subsidiary of Jefferies Group, Inc., is authorised and regulated by the UK Financial Services Authority.
Contact:
Tom Tarrant, Jefferies & Company, Inc., 203 708 5989, ttarrant@jefferies.com
Desiree Maghoo, Jefferies International Ltd, 44 20 7029 8085, dmaghoo@jefferies.com
