Buyers of asset management firms committed $51.2 billion in 241 transactions globally in 2007, according to New York-based Jefferies Putnam Lovell, 16% above the prior year by disclosed deal value, and almost 26% higher than the 191 deals announced in 2006. Even excluding the record 11 initial public offerings by fund management companies in 2007, the trade sale total equaled $43 billion, eclipsing the year-earlier $42 billion.
Among the trends Jefferies Putnam Lovell expects to unfold during the next 12 months are:
Transaction activity, driven by the secular demand for higher-growth alternative investments, will be solid. Nevertheless, a large group of prospective sellers will elect to wait for sunnier markets, and resurrected record profits, before returning to the auction block.
Buyout firms will continue to shop aggressively in the asset management and financial technology aisles by offering equity-heavy deals.
Financial technology firms will continue to attract attention from strategic buyers, as exchanges gird themselves for conflict with alternative trading venues, custodians look for the differentiating edge, and buy-side firms seek further methods of out-trading a subprime-ravaged sell-side.
Alternative asset managers will account for a record proportion of deals in 2008. Long-only players will step up their search for short skills. Alternative firms, looking to dampen the revenue volatility from performance fees, will seek more asset-based fees to improve earnings quality.
Public markets will remain a viable source of liquidity for asset managers. As asset management becomes a more clearly defined, understood and independent sector within financial services, its higher-value attributes will shine through. Multiples paid for quoted fund managers globally will rebound with a broad market.
Cross-border transaction activity will continue to drive a growing portion of deal activity. Asia’s long-term promise remains bright, and US asset managers must fulfill their customers’ voracious demand for international securities.
The report is available at www.jefferies.com/jpl.
About Jefferies Putnam Lovell
Putnam Lovell, the division of Jefferies & Company, Inc. focused on the financial services industry, offers a wide range of corporate advisory services, including mergers and acquisitions advice and capital raising. Putnam Lovell’s global client base is comprised of diversified financial services firms, institutional and mutual fund managers, alternative investment managers, banks, broker-dealers, insurers, and financial technology firms. Putnam Lovell was founded in 1987 and operates from offices in New York, San Francisco, Boston, and London. Since July 2007, Putnam Lovell has been a division of Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF). For more information please visit www.putnamlovell.com.
About Jefferies
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com)
Contact:
Tom Tarrant
Jefferies & Company, Inc.
203-708-5989
ttarrant@Jefferies.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment