DeVoe recorded 38 deals in the second quarter, the fifth consecutive quarter of 35 or more transactions and the 11th straight quarter of 30 or more transactions.
In the second quarter, several mega-deals helped transaction activity clear $100 billion in AUM, the second-highest total ever recorded and starkly higher than the under $21 billion in transactions during the first quarter of 2017. Most notably, Focus Financial Partners in May purchased a majority stake in SCS Capital, a $16.5 billion firm.
Nevertheless, the average AUM of RIA sellers is down from more than $1 billion in 2016 to $698 million through the first half of this year.
Break-away brokers appear to be declining as a drive of deal activity, says DeVoe.
“There’s still a strong foundation for some of this activity to be sustained, but a surge that was driven by forgivable loans is likely to recede and we’ll return to a new level of normalcy in the breakaways,” he says.
Year to date, breakaways from broker-dealers were responsible for 52 percent of the M&A activity, compared to 54 percent last year and 58 percent in 2015.
In addition to its M&A consultancy, San Francisco-based DeVoe & Company tracks RIA transactions, publishing their findings in quarterly RIA Deal Book reports.