Mergers and acquisitions in the financial sector fell below the record-breaking numbers of 2015, but PricewaterhouseCoopers still calls the activity level last year “robust.”
While the mutual fund sector deals were in line with prior year volumes, both hedge fund and wealth management deal volumes declined, PwC says in the report.Total deal numbers were down 13 percent to 126 in 2016, compared to 144 in the prior year.
Total deal value was up 5 percent to $10.1 billion in 2016. There were two billion-dollar-plus deals in 2016 contrasted with three billion-dollar-plus deals in each of 2015 and 2014.
The largest deal of 2016 was in the alternatives space, with Ares Capital Group’s $3.4 billion acquisition of American Capital Limited. “This transaction was partly fueled by the activist investors’ continued pressure to optimize value of their investments,” PwC says. “We expect activist investors will continue to pressure financial services companies to restructure and divest sub-optimal businesses, which could drive future asset and wealth management activity.”
The $2.6 billion merger of Henderson Group, based in the United Kingdom, and U.S.-based Janus Capital created a money manager with $320 billion in AUM in the second-biggest deal of the year.
The Department of Labor’s fiduciary rule prompted the acquisition of Jefferson National by Nationwide, according to Nationwide.
On another note, asset managers specializing in socially responsible investment platforms were popular last year. as seen in FOLIOfn’s acquisition of First Affirmative Financial Network and Eaton Vance’s acquisition of CaIvert Investments, according to the report.
Serial investing was also popular, with Wealth Enhancement Group and Mercer Advisors both making three acquisitions each, followed by United Capital Financial Advisers and Krilogy Financial, which made two acquisitions each.