PA ANALYSIS: Is M&A a raw deal for asset managers?

The ‘squeeze’ on asset managers’ balance sheets is well known, while recent deals in the sector have failed to cheer shareholders, but there are nonetheless pointers to the industry’s future winners.

PA ANALYSIS: Is M&A a raw deal for asset managers?


The Standard Life/Aberdeen tie-up has obviously been a huge talking point across the industry over the past month, particularly after the Amundi/Pioneer and Henderson/Janus deals of last year.

Unfortunately, while stocks in the aforementioned companies rose after the initial announcements, they then fell in subsequent weeks as investors got to grips with challenges facing the industry.

In its latest study, Global Asset Managers: What have we learned from recent deals?, Bernstein suggests investors “seem to prefer the more offensive posture of the deal driven by distribution and product capabilities” as opposed to “defensive attempts to harvest cost synergies that might point to weakness in the outlook for standalone businesses”.

The report goes on to suggest “guiding principles” for future M&A in the sector.

Firstly, it suggests that with 38% of global AUM now in passives, active managers are acting to protect their interests; and secondly it says that multi-asset funds will become ever more important for these businesses.

Following on from a discussion this week with JP Morgan Asset Management’s Jasper Berens, it is clear that multi-asset ‘outcome-oriented’ solutions have fast become fund groups’ best route to diversifying business streams away from just the “building blocks” of asset allocation in traditional equity and bond funds that the rise of passives threaten.


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