Merger and acquisition activity in the third quarter of 2008 has highlighted a seemingly dramatic slide in the valuations of asset management companies.
Transactions involving $1,000bn (£588bn, €736bn) of assets under management took place in the third quarter, a steep increase on the $300bn of assets that changed hands in the same period last year, according to data from Jefferies Putnam Lovell, a New York-based investment bank. However, total deal value edged up to just $6.4bn from $6.1bn a year ago.
Jefferies said the data reflected both declining valuations for fund managers and the emergence of forced sellers such as Lehman Brothers, which struck a deal to sell its Neuberger Berman arm to Bain Capital and Hellman & Friedman for $2.15bn in late September.
Jefferies recorded 69 asset manager transactions in the third quarter, up from 52 in the same period last year, with divestitures accounting for 40 per cent of deals, against 23 per cent in Q3 2007. Aaron Dorr, managing director of Jefferies Putnam Lovell, said: “In the short-term we expect more banks and other cash strapped financial institutions to retreat from owning money managers.”
Other deals in the third quarter included Allianz’s takeover of Cominvest, Fortis’ acquisition of the balance of Artemis and Nippon Life’s purchase of a 5
per cent stake in Russell Investments.