Mergers and acquisitions in the financial field are off to a big start with the announcement Wednesday that global insurance broker Hub International Limited bought Sheridan Road Financial, which has more than $14 billion in assets under management.
The move comes two days after Hub announced acquiring The Rubin Group, a New York City based insurance and risk management firm.
The deals follow a year when the number of mergers and acquisitions across all industries grew dramatically, according to PricewaterhouseCoopers. “Dealmakers are at the center of an unprecedented M&A cycle in which U.S. investors, particularly private equity firms, have record access to capital,” PricewaterhouseCoopers said in its M&A year-end review.
“Access to capital will likely preempt many other variables in driving M&A deals [in the future] so long as companies are ready and willing to compete in markets where scale increasingly matters and disruption has become the new norm,” the firm said.
During the first nine months of 2018, values for mergers and acquisitions of U.S. companies rose to more than $3 trillion and were on pace to surpass $4 trillion by the end of the year, largely reflecting a surge in megadeals, PricewaterhouseCoopers said in a report completed before all of the year-end data was available. While 2018’s deal values may not beat 2015’s record $4.7 trillion when all is tallied, it could exceed levels seen in 2007 just before the financial crisis.
According to another source, Acuris, a research and news organization for the financial industry, U.S. mergers and acquisitions hit $3.53 trillion for 2018, an 11.5 percent increase over 2017.
The landscape also is changing for the registered investment advisory industry, according to Fidelity Investments. Based on data for the first 11 months of 2018, the number of deals was down but the size of the deals increased. By the end of November, the AUM involved in RIA deals was up 10 percent from the same period in 2017, while the total number of deals was down 15 percent to 104
In the Hub-Sheridan deal, Hub has acquired the assets of Sheridan Road Financial and certain of its affiliates, a leading institutional retirement consulting and private wealth firm. Terms of the transaction were not disclosed.
Headquartered in Chicago with eight additional offices throughout the U.S., Sheridan Road is an institutional investment consulting and private wealth firm offering investment management, retirement plan expertise, fiduciary services, wealth management, financial and retirement services planning and specialized executive benefit services. Sheridan Road services more than 300,000 individuals through its retirement plan and wealth management practices.
The acquisition helps Hub expand its retirement services, said David Reich, Hub's national president of retirement services for Hub International Investment Services. “Sheridan’s capabilities add depth and breadth to our growing platform of holistic retirement services,” he said.