Money manager mergers and acquisition activity has witnessed a 70 percent increase in the third quarter from the previous quarter, according to a recent report from Pension & Investments.
The third quarter also saw 14 money management deals compared to 10 reported in the previous quarter, while 16 deals were reported in the third quarter of last year.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
Money manager M&A asset transactions
Total assets in transactions during the third quarter rose to $230 billion, showing an increase of 70 percent from the previous quarter. However, this was down by over 35 percent when compared to the third quarter of last year.
The following graph highlights Assets Under Management involved in money manager merger and acquisition transactions for the past three years:
Largest transaction by New York Life
During the third quarter, the largest transaction as measured by assets under management was reported by New York Life Investment’s purchase of Dexia Asset Management, involving about $100 billion AUM.
The third quarter also saw Goldman Sachs Asset Management’s purchase of Deutsche Asset and Wealth Management’s stable value business, which handles assets of around $21.6 billion. The deal signifies the latest efforts by GSAM to boost its defined contribution business.
Last year, GSAM acquired Dwight Asset Management. Currently, the GSAM arm handles $955 billion.
Stable value funds are a kind of investment option available in U.S. retirement savings plans. Such funds are used for premium investments like diversified fixed income portfolios, which guard the funds against interest rate volatility.
BATS and Direct Edge Merger
During August, BATS Global Markets, Inc. Class A Common Stock (BATS:BATS) and Direct Edge Holdings LLC announced their merger. The deal involving the two stock exchanges is expected to close in the first half of 2014 and the newly formed company is set to replace NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), as the second largest stock exchange operator in the country after NYSE Euronext (NYSE:NYX).
Seven deals during the last quarter didn’t involve money managers. Some of the prominent deals include BATS’ merger, Alberta Investment Management Co’s acquisition of 20 percent ownership in proxy advisory firm Glass Lewis & Co. LLC.
Other large deals by AUM
Apart from New York Life Investments’ acquiring Dexia, other prominent deals were also reported during the third quarter. Alleghany Corporation (NYSE:Y) acquired a 6.25 percent equity ownership interest in alternative investment manager Ares Management LLC for $250 million. Macquarie Group Ltd (ASX:MQG) (OTCMKTS:MQBKY) also announced it would acquire ING Investment Management Korea, ING’s South Korean money management business.