Battered market 'to yield bumper crop of M&A'

13 January 2009

After the market turbulence of 2008, this year is expected to produce a boom in asset management mergers and acquisitions as banks and insurers sell off distressed investment arms, funds consolidate and financial players move in to snap up undervalued firms, a new report has claimed.

The analysis from investment banking group Jefferies Putnam Lovell (JPL) said that while last year saw the second highest number of deals on record at 217, the disclosed value of those deals plummeted from $52.1 billion in 2007 to $16.1 billion.

Only three deals in 2008 had purchase prices above $1 billion, it added, compared to 15 such transactions the year before.

The company's New York-based managing director, Aaron Dorr, commented that after the turmoil that engulfed the markets last year, the "most active buyers" of the past decade - commercial banks, investment banks and insurance companies - are "now becoming sellers of, or seeking strategic partnerships for, their asset management businesses".

"We expect pure-play asset managers and private equity firms to be the biggest beneficiaries of this massive reshaping of the industry," he added.

Founded in 1987, JPL has completed more than 165 M&A deals worth over $30 billion.

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