FOR IMMEDIATE DISTRIBUTION
AND RENEWED SALES OF INDEPENDENTS TO DRIVE M&A ACTIVITY
IN THE GLOBAL ASSET MANAGEMENT INDUSTRY DURING 2010
As outlined in "On the Road Again," a review of 2009 M&A activity in the global asset management, broker-dealer and financial technology industries published by Jefferies, aside from the array of large deals completed during the year, deal making was generally quiet as firms focused on reducing their cost structures and realigning their strategic initiatives. However, Jefferies expects that a number of factors will contribute to robust deal activity in the global investment management sector in 2010 and beyond.
"Despite the severe markets of early 2009, the global asset management industry rebounded as market conditions improved following the March lows," said Aaron Dorr, a New York-based managing director within Jefferies' Financial Institutions Group. "While 2009 was a very volatile year for the industry, it also proved to be a very transformative one, setting the industry on a course to consolidate further in the post-Great Recession era."
As discussed in "On the Road Again," the key trends that Jefferies expects to unfold in 2010 include:
- Divestitures, which remained the deals du jour in 2009, will continue during the first half of 2010 and then taper off while transaction activity involving independently-owned asset managers, encouraged by more stable markets, begins to ramp up.
- Pure-play asset managers, which were the primary buyers of asset management businesses in 2009, will continue to be at the forefront of buying activity in 2010 as they execute their strategic initiatives.
- Given the current push among legislators to force banks to limit proprietary trading and private equity investing, independent alternative asset managers stand to meaningfully capitalize on the investment opportunities vacated by the banks.
- While private equity firms largely kept their wallets closed in 2009, sponsors will be more active in 2010. Industry fundamentals remain compelling to private equity investors which have significant stores of capital ready to deploy.
- Rejuvenated public pricing for asset managers and a desire to retain operating control over their businesses have reignited interest among owners in seeking public listings.
- The recessionary markets resulted in meager cross-border deal activity in 2009. However, as asset managers continue to seek growth overseas and to develop their global product and distribution capabilities, cross-border activity will ramp up in 2010.
- Deal activity in the financial technology and securities brokerage/services sector was slow in 2009, although activity accelerated as the year progressed. Transaction flow was driven by ongoing consolidation in the financial technology sector and the seemingly inevitable regulatory reforms expected in the brokerage and exchange sectors, which will continue to drive deal activity in 2010.
Jefferies, a major global securities and investment banking firm, has served companies and their investors for more than 45 years. Jefferies & Company, Inc. is the principal US operating subsidiary of Jefferies Group, Inc. (NYSE: JEF: jefferies.com), and Jefferies International Limited is the principal UK operating subsidiary. Jefferies International Limited, a UK-incorporated company, is authorised and regulated by the UK Financial Services Authority.
Contact:
US: Tom Tarrant, Jefferies & Company, Inc., 212-284-2389, ttarrant@jefferies.com
US: Josh Passman, CJP Communications, 212 279 3115 x203, jpassman@cjpcom.com
UK: Desiree Maghoo, Jefferies International Ltd, 44 20 7029 8085, dmaghoo@jefferies.com
