Schwab Advisor Services on Wednesday reported a big leap in the size of registered investment advisor firms merging in the first half of this year.
The average size of firms merging almost doubled to $770 million in assets under management, versus $412 million during the same period last year.
A greater proportion of those deals involved firms with $1 billion or more assets under management, despite there being fewer transactions over the same period last year, officials reported.
According to Schwab's report, there were 27 M&A deals involving RIAs in the first half of 2011, representing approximately $20.8 billion in total assets under management acquired in the first two quarters. In the first half of 2010, there were 30 RIA M&A transactions representing $12.4 billion in total assets under management acquired.
"Thus far in 2011, we've seen a significant leap in the average deal size due to a greater proportion of those with $1 billion or more in assets under management, despite a slight decrease in transactions over the same period last year," said David DeVoe, managing director of strategic business development for Schwab Advisor Services.
The 12 deals in the second quarter of 2011 represented $13.2 billion in assets under management and represented a decrease in deals from the 14 deals with approximately $8 billion in assets under management reported in the same half in 2010.
The average deal size increased with the 12 deals tracked by Schwab in the 2nd quarter of 2011 had an average deal size of $1.1 billion, versus $571 million in the first half of 2010. The dominant buyer category continues to be RIAs which conducted 12 transactions in 2011.
"RIA's themselves continue to be the dominant buyer category, demonstrating their growing sophistication in mergers and acquisitions," DeVoe said. "It also shows RIAs' willingness to use M&A as one way to achieve business goals and objectives."