GLOBAL - TCW's purchase of Metropolitan West Asset Management may be a predictor of things to come as independent firms will drive merger and acquisition activity in 2010, investment bank Jefferies said.
Asset management M&A activity in 2009 was driven by maga-deals and bank divestitures. For example, nine transactions involved firms with over US$100bn in assets under management.
In the fourth quarter, however, more M&A deals involving independent firms began to crop up, said Jefferies. In December, bond manager TCW announced its acquisition of fixed income manager Metropolitan West.
But Jefferies managing director Aaron Dorr said: "We expect divestitures to continue to play out through the first half of 2010 when the urgency of capital raising and strategic realignment of financial institutions should taper off. We also anticipate aging owners of independent firms who missed the last bull market to seek to transact in 2010 given improving market conditions, asset flows and pricing."
Overall deal volume was down in 2009 with Jefferies tracking 143 deals, down from 219 the previous year. Despite this, the deals involved moving a record $4trn in assets under management, compared to $1.95trn in 2008.
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