Here are the money managers Credit Suisse says are likeliest buyers and sellers as analysts expect more M&A
- The wave of consolidation across wealth and asset management is set to continue.
- That’s per Credit Suisse analysts, who have released a new list of likely buyers and targets.
- They see UBS and State Street among likely buyers, and Janus Henderson as a likely seller.
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After a record year for asset and wealth management combinations, Credit Suisse analysts expect to see more deals.
A new report from a team of analysts led by Craig Siegenthaler published on Tuesday outlined the latest mix of companies they see as prime M&A candidates, building on a list they released in December.
Credit Suisse’s own asset management arm is also said to be a deal target, according to reports, though the bank has denied it is looking to selling the unit recently involved in the collapse of Greensill Capital.
The analysts anticipate the wave of M&A in the space to continue as a result of asset managers seeking out ways to improve the way they distribute their products to investors; record low valuations for such firms in the US; a pickup in investor activism; and the possibility of a higher US capital gains tax under the Biden administration pushing wealth managers to consider combinations, among other factors.
Here are the firms analysts outlined.
- DWS: The asset management business of Deutsche Bank, which oversaw €820 billion (around $1 trillion) as of March, is actively seeking out “large-scale deals as well as bolt-on acquisitions,” according to a Bloomberg News report in April citing people with knowledge of the matter.
- Franklin Templeton: The San Mateo, California-based firm bought smaller rival Legg Mason last year. It reported $1.5 trillion in assets under management as of April. CEO Jenny Johnson told analysts last month that the firm is looking at potential acquisitions, “usually looking not only for assets and expanding our distribution there but geographic benefit, maybe in a location that we’re not located, as well as capabilities.”
- Invesco: Credit Suisse analysts noted that Trian, the activist investor, has held stakes in Invesco and Janus Henderson with an eye to a possible combination. Invesco CEO Marty Flanagan told analysts in April that the firm feels as though it has “most everything we need,” though it would likely look to acquire something if it came with “bolt-on capabilities,” possibly around credit or infrastructure investing. Atlanta-based Invesco oversaw $1.4 trillion in assets under management as of March.
- JPMorgan: The largest US bank’s CEO, Jamie Dimon, has been vocal about searching for possible acquisitions. Last year, the firm said it would acquire an asset management-tech startup called 55ip for an undisclosed amount. Dimon told analysts in April that “the door is open to anything that makes sense,” and the bank is looking “at tons of things ourselves,” with the possibility for deals in payments and asset management. “If you got great ideas for us, let us know,” he said, according to a transcript on Sentieo.
- Patria: The Latin America-focused alternative asset manager, which offers investments including private equity, infrastructure, real estate, and credit, went public in February. Alexandre Saigh told analysts last month that the Cayman Islands-based firm is “actively exploring opportunities to use our IPO capital for strategic M&A.”
- UBS: The Swiss bank, which counts its wealth management business among the largest in the world with $3.1 trillion in invested assets as of March, was reportedly in talks with State Street last year to merge their asset management businesses, according to the Wall Street Journal. UBS’s asset management business, led by Suni Harford, oversaw some $1.1 trillion in invested assets as of March. Chief Executive Ralph Hamers told analysts in January that “whether it is the asset manager or not, we do see room for further organic growth.”
- State Street: The Boston-based firm’s asset management arm, State Street Global Advisors, was reportedly in talks to merge with its counterpart at UBS. SSGA reported $3.6 trillion in assets under management as of March, and is known for its lineup of ETFs marketed as “SPDRs.”
Credit Suisse analysts had previously named SSGA as a possible acquisition target, but had shifted it to a potential buyer in its latest list. Bloomberg News reported last December that State Street was informally working with an advisor to review strategic alternatives for SSGA, including a merger with a rival. State Street declined to comment to Bloomberg at the time.
- Banco do Brasil’s asset manager: The bank had resumed the process of trying to sell its asset management unit earlier this year, Reuters reported in January, citing three people with knowledge of the matter. The state-controlled firm, which declined to comment to Reuters on the situation, oversaw some $217 billion in assets, according to Bloomberg.
- BBVA’s asset manager: BBVA on Tuesday closed the sale of its US subsidiary to PNC, a deal first announced last year. CEO Onur Genc said in April: “We don’t see M&A as, ‘We have capital, so let’s do M&A.’ No, not at all. The M&A has to justify itself in terms of numbers. You have to come up with a value creation opportunity.” BBVA’s asset management business oversees some €110 billion (around $134 billion), and has a presence in Spain, Portugal, Luxembourg, Turkey, Mexico, Peru, Colombia, and Argentina, according to its website.
- Cohen & Steers: The New York-based asset manager reported record assets under management as of March, which it said was due to net flows of $3.8 billion during the quarter and the market’s rise. Its advisory accounts also logged net inflows of $1.7 billion during the quarter, the firm said. Its chief executive, Robert Steers, took a medical leave of absence earlier this year, returning in that role as of June 1.
- Janus Henderson: Activist investor Trian has held stakes in Janus and Invesco, analysts note, and “they have not hid their intentions of M&A.” The London-based asset manager, which oversaw some £294 billion ($416 billion) as of March, is itself the combination of Janus Capital Group and Henderson Group.
- WisdomTree: Credit Suisse analysts have repeatedly pegged WisdomTree, the New York-based investment manager known for its array of exchange-traded funds, as a potential target. WisdomTree oversaw $69.5 billion in assets under management as of April, and reported $1.3 billion in net inflows during the first quarter.
- Victory Capital: The San Antonio, Texas-based asset manager, which acquired USAA’s mutual fund, ETF, and college savings plan business in 2019, oversaw $157 billion in assets under management as of April. In March the firm completed its acquisition of Connecticut-based THB Asset Management, which managed $555 million in assets through January. Victory Capital went public in 2018.
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