Predictions
for the New Year continued to flood in last week and this morning –
even if the main news story around Europe seemed to be that it was
snowing.
Some of the predictions for 2010 looked to the
structural rather than the investment side of the business. Last week,
Jeffries & Company released a forecast predicting that global
M&A activity in the asset management industry would be dominated by
“significant strategic deals involving independent firms such as
Advisory Research’s sale to Piper Jaffray and Metropolitan West Asset
Management’s purchase by TCW” in 2010.
This contrasts with 2009
when divestitures dominated and only 61 independently-owned managers
changed hands – the lowest level in more than a decade, and 57% below
the previous year’s tally, according to the New York-based firm.
“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,’’ said Aaron Dorr, a managing
director in Jefferies’ Financial Institutions Group. “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.”
The biggest deal in the fourth quarter
of 2009, both by assets under management and disclosed deal value,
perhaps set the tone. It was Deutsche Bank’s €1.3bn acquisition of the
German private bank Sal. Oppenheim & Cie – a firm that bills itself
as “one of the leading independent private banking groups in Europe”
and “a family enterprise […] now in the seventh generation”.
Meanwhile,
asset managers – independent or otherwise – looking to make cost
savings may find UCITS IV does not provide the succour they had hoped.
According to a new survey from Ernst & Young released today, UCITS
IV is not bringing the operational cost reductions many European
investment fund managers assumed it would.
“The focus has
turned to using UCITS IV to optimize the operating model and fund
ranges, to align better with the business strategy of the
organization,” says Crispin Rolt, Ernst & Young’s UCITS IV leader.
“The investor will still benefit and by pooling funds it is anticipated
that there will be opportunity to reduce some of the expense borne by
the fund.”
The investor will still benefit. Hmm. Haven’t we heard that somewhere before?
And
if the news that investors are still waiting to benefit from possible
cost reductions doesn’t paint your Monday morning grey, try this for
size: according to a survey of global compliance offices conducted by
Complinet, a provider of risk and compliance solutions to the financial
services industry, the next financial crisis will strike within the
first half of the new decade.
“The continuing lack of company
transparency and accountability to the markets and the public makes the
possibility of another crisis almost assured,” says one of the
businesses questioned by Complinet – and 77% of those surveyed agree
with him.
Ah dear. And all the lovely snow is turning to slush…
Fiona Rintoul, Editorial Director
©2010 Funds Europe
