Europe's barbell becomes more pronounced—larger asset / wealth managers swallow smaller competitors at pace.

Current market:

Consistently high M&A activity levels

We are seeing:

Europe's barbell becomes more pronounced—larger asset / wealth managers swallow smaller competitors at pace:

• Larger deals remain rare (e.g., Altor's acquisition of Mandatum)
• Medium-sized deals—UK retains its crown for consolidation activity (e.g., LGT's acquisition of abrdn Capital as well as abrdn Smaller Companies Income Trust & Shires Income merger)
• Smaller deals—France replaces the UK as the European hotspot of consolidation activity (>5 French AWM consolidation deals)

Private credit managers deploy inorganic strategies:

• M&A (e.g., Man Group's acquisition of Varagon Capital)
• JVs (e.g., IDC Ventures' JV with Arena Investors)
• Equity investments (e.g., Ageas' acquisition of 5.9% of Royal Park)

Polarisation of bank strategies:

• Bulge bracket banks acquire (e.g., Goldman Sachs' acquisition of Groupe Crystal)
• Swiss banks dispose of non-core assets (e.g., UBS's disposal of 51% of UBS Hana Asset)
• European banks restructure (e.g., Commerzbank's demerger of Yellowfin)

Key drivers / challenges:

Signs of fragility in the AWM sector:

• Material dip in new fund launches—lowest number of UK funds for 2 decades
• Government intervenient to improve attractiveness of London as a financial hub (e.g. UK Chancellor's plans to modify the UK's MiFID II-equivalent legislation)
• Withdrawal of known brands (e.g., Ardevora's closure to external clients) Sub-sector M&A activity heats up:

Trends to watch:

Rise of Wealth Tech:

• Established players' hunger for top tech (e.g., EFG Hermes' minority equity investment in Kenzi Wealth)
• Wealth Tech consolidating market share (e.g., Objectway's acquisition of Nest Wealth
• Wealth Tech attracting growth capital (e.g., Wealthon, Midas, Unbox, ZILO, Scalable Capital and atomos all successfully raised capital in the last 12 months)

Mixed reaction to ESG-focused managers

• Dwindling interest in funds citing ESG attributes— only 6 new launched in H2 2023, compared with55 in H1 2023
• Continued interest in new ESG Wealth Tech (e.g., Industrial Thought's investment in Integrum ESG)

Our M&A forecast

Consolidation activity is highly likely to continue notwithstanding proposals to loosen the stranglehold of MiFID II's restrictions on bundling of research costs with trading services expenses.

As the Wealth Tech space gets more crowded, financial sponsors are likely to encourage combinations between value-accreditive portfolio businesses.

Asset / Wealth Management – Publicly reported deals & situations

Market consolidation

Deal highlights:

White & Case advised LGT, the world's largest independently owned wealth manager, on its acquisition of abrdn Capital, the FCA-regulated discretionary fund management business of abrdn, with £6 billion of AuM across the UK, Jersey and Guernsey.

Market commentary:

Launches of funds claiming ESG attributes all but dried up in H2 2023. Just six funds citing ESG factors launched in H2 2023, compared with 55 in H1 2023. (Financial Times–January 2024)
Asset managers have launched the lowest number of funds for UK investors in two decades, as higher living costs and interest rates have prompted investors to move out of investment funds. (Financial Times–January 2024)

Larger:

• Altor: Finland, Acquisition of Mandatum (February 2024)
• Bank Delen: Netherlands, Acquisition of Puur Beleggen (January 2024)

Mid-sized:

• Bantleon: Switzerland, Acquisition of 62% of Credit Suisse Investment Partners (June 2024)
• Janus Henderson Group: Kuwait, Acquisition of Tabula Investment Management (May 2024)
• iM Global Partner: UK, Acquisition of (undisclosed) minority stake in Trinity Street Asset Management (April 2024)
• Amundi: Switzerland, Acquisition of Alpha Associates (February 2024)
• Esterad: Bahrain, Acquisition of Blue Sky (February 2024)
• Groupe Cyrus & Herez: France, Merger (December 2023)
• Ofi Invest AM: France, Acquisition of Egamo (November 2023)
• Carnegie: Sweden, Acquisition of Erik Penser's wealth management and corporate finance businesses (October 2023)
• LGT: UK, Acquisition of abrdn Capital (September 2023)
• abrdn Smaller Companies Income Trust & Shires Income: UK, Merger (July 2023)
• Longchamp AM & Sanso IS: France, Merger (July 2023)
• Man Group: Switzerland, Acquisition of 51% of Asteria (June 2023)

Smaller:

• LOYS: Germany, Acquisition of 50% of Vates Invest (May 2024)
• Groupe Premium: France, Acquisition of La Phoceenne d'investissement (April 2024)
• Groupe Premium: France, Acquisition of DDC Gestion de Patrimoine (April 2024)
• Groupe Premium: France, Acquisition of NDC Associes (April 2024)
• Solventis: Spain, Acquisition of Altair Finance (April 2024)
• Sienna Investment Managers: Italy, Acquisition of Ver Capital (April 2024)
• J&T Arch: Cyprus, Acquisition of (undisclosed) stake in Emma Alpha Holding (March 2024)
• MoraBanc: Spain, Acquisition of majority stake in Tressis (March 2024)
• Groupe Crystal: France, Acquisition of Opti Finance (March 2024)
• Astoria Finance: France, Acquisition of Patriam (January 2024)
• Maven Capital Partners UK / Mattioli Woods: UK, Acquisition of Newable Ventures (December 2023)
• abrdn: US, Acquisition of four closed-end funds from First Trust Advisors (October 2023)
• Frank Vlayen: Belgium, Acquisition of 47.5% of Leo Stevens Private Banking (October 2023)
• Progeny: UK, Acquisition of Fiscal Engineers (August 2023)
• Evelyn Partners: UK, Acquisition of Millen Capital (August 2023)

Financial planning M&A

Deal highlight:

White & Case advised Söderberg & Partners, the KKR and TA-backed Nordic provider of wealth management and corporate pension services, on its investment into Cheltenham Independent Financial Advisers.

• Söderberg & Partners: UK, Acquisition of significant minority interest in Fidelius (January 2024)
• Söderberg & Partners: UK, Equity investment in Cheltenham Independent Financial Advisers (July 2024)
• Malakoff Humanis: France, Acquisition of 45% of Epsens (December 2023)
• Perspective Financial Group: UK, Acquisition of Campbell Harrison from Fairstone Group
• Perspective Financial Group: UK, Acquisition of Strategic Financial Portfolios (October 2023)
• Söderberg & Partners: UK, Acquisition of Timothy James & Partners (September 2023)
• Fairstone: UK, Acquisition of Prosperity Wealth (July 2023)

Fund management M&A

• Indecap: Sweden, Acquisition of PriorNilsson Fonder (May 2024)
• Stoneweg: Switzerland, Acquisition of Cromwell Property Group's European fund management platform (May 2024)
• Dunas Capital: Spain, Acquisition of Gesnorte (April 2024)
• FNZ: Luxembourg, Acquisition of IFSAM (January 2024)
• IBI: Israel, Acquisition of Psagot Mutual Funds (December 2023)
• Phoenix Investment House: Israel, Acquisition of Psagot Compass Hedge Funds (December 2023)
• Ohman Group: Sweden,Acquisition of majority stake in Lannebo Fonder (November 2023)
• Evli: Finland, Acquisition of 67% of Zenito (November 2023)
• Altum Group: Luxembourg, Acquisition of Link Fund Solutions (Luxembourg) (August 2023)
• REYL Intesa Sanpaolo: Switzerland, Acquisition of Carnegie Fund Services (July 2023)

Debt servicing M&A

Deal highlight:

White & Case advised DoValue, Southern Europe's leading servicer of credit portfolios and ROEs, on its acquisition of Italian credit manager Gardant, from investment fund Elliott.

• DoValue: Italy, Acquisition of Gardant (July 2024)
• SpareBank 1 Gruppen: Norway, Acquisition of 68.6% of Kredinor (April 2024)
• ieDigital: UK and Middle East, Acquisition of ABAKA (January 2024)
• ieDigital: US, Acquisition of Connect FSS (October 2023)
• Trust / business administration M&A Allfunds: Paying agent, Acquisition of BCC Iccrea's Spanish paying agent business (July 2023)

Direct lending / credit management M&A / fundraisings

Market commentary:

80% of new European private credit funds borrowed from banks via 'subscription lines' in 2023, funding that allows them to lend before tapping their investors for cash. (Financial Times–January 2024)

Ireland and Luxembourg intensified calls for tougher global rules on shadow banks, with €10 trillion in assets in the two Member States. (Financial Times–January 2024)

M&A: 

• Kudu Investment Management: UK Minority equity investment in Apera Asset Management (July 2023)
• Ageas: Belgium, Acquisition of 5.9% of Royal Park Investments (July 2023)
• Man Group: USA, Acquisition of controlling stake in Varagon Capital Partners (July 2023)

JVs:

• IDC Ventures, Private credit, Private credit JV with Arena Investors (June 2024)
• Z Capital: Saudi Arabia, Saudi Arabia direct lending JV with Zahrat Al Amaal Holding Company (March 2024)

Fundraisings:

• Hayfin Direct Lending Fund IV: Private credit, Successful €6 billion funding round (August 2023)

Private equity M&A

Deal highlights:

White & Case advised , Milestone, a leading growth capital firm, on its majority investment in Evli Alexander Incentives, the financial adviser specializing in share plan design and administration, and the launch of its 'Allshares' platform.

White & Case advised Motive Capital on its acquisition of the With Intelligence group, a leading provider of data analytics services in the asset management industry, from Intermediate Capital Group and management shareholders.

Acquisitions:

• Wendel: UK, Acquisition of 51% stake in IK Partners (May 2024)
• Bregal Milestone: Finland, Majority equity investment in Evli Alexander Incentives (March 2024)
• Motive Capital: UK, Acquisition of majority equity interest in With Intelligence group (July 2023)

Disposals:

• Eurazeo: Spain, Disposal of 25% of MCH Private Equity (May 2024)

High investor appetite

Deal highlights:

White & Case advised Parthenon Capital on the acquisition of a majority equity interest in Titan Wealth.

Market commentary:

UK Chancellor Jeremy Hunt confirmed plans to repeal EU-era legislation that required investment firms to unbundle the cost of research from trading services expenses, in a bid to boost London's attractiveness to investors. (Fintech Global–November 2023)

Financial sponsors:

• Parthenon Capital: UK, Acquisition of majority equity interest in Titan Wealth (November 2023)
• Patria Investments: UK, Acquisition of abrdn's private equity solutions business (October 2023)
• LFPI: France, Acquisition of Mandarine Gestion (July 2023)
• Permira: Spain, Acquisition of 40% of AltamarCAM (July 2023)
• Searchlight Capital: UK, Acquisition of Gresham House (July 2023)
• IK Partners: Switzerland, Acquisition of equity stake in Cinerius (July 2023)

Insurers:

• Odealim: France, Acquisition of Euodia (March 2024)
• Malakoff Humanis: France, Acquisition of 45% of Epsens (December 2023)
• Generali: USA, Acquisition of Conning (July 2023)

Foreign investors: 

• AMG: Spain, Acquisition of minority stake in Suma Capital (May 2024)
• Walter Global Asset Management: UK, Acquisition of (undisclosed) minority stake in Saranac Partners (March 2024)
• Hana Securities: South Korea, Acquisition of 51% of UBS Hana Asset Management (October 2023)
• HighVista Strategies: US, Acquisition of abrdn's US private markets business (July 2023)

SWFs:

• QIA: China, Acquisition of 10% of ChinaAMC (June 2024)

MBOs:

• Twelve Capital Holding: Switzerland, Acquisition of 30% of Twelve Capital Holding (May 2024)

Differing bank prerogatives

Tag-out (disposals):

• Graubündner Kantonalbank: Switzerland, Disposal of 30% of Twelve Capital Holding (May 2024)
• UBS: South Korea, Disposal of 51% of UBS Hana Asset Management (October 2023)
• Intesa Sanpaolo: Switzerland, Disposal of 51% of Asteria (June 2023)

Tag-in (acquisitions):

• Goldman Sachs Alternatives: France, Acquisition of majority stake in Groupe Crystal (May 2024)

Tag-out (reorganisations):

• Commerzbank & Yellowfin Asset Management: Germany, Demerger (August 2023)

Tag-in (JVs):

• BNY Mellon: WealthTech, MENA wealth management technology JV (Alpheya) with Lunate (November 2023)

New markets / business lines

• Janus Henderson Group: Wealth management, JV with NBK Wealth (May 2024)
• Commerzbank: Impact / ESG asset management, Acquisition of 18% of NIXDORF Kapital (March 2024)

Digitalisation marches on

Deal highlight:

White & Case advised Oaktree Capital Management and its WealthTech portfolio business atomos in relation to Willis Towers Watson's equity investment into atomos.

Established players dig deep for tech:

• EFG Hermes: Denmark, Acquisition of minority equity stake in Kenzi Wealth (May 2024)
• FE fundinfo: Germany, Acquisition of Dericon (May 2024)
• Virgin Money: UK, Acquisition of JV stake in Virgin Money Investments (February 2024)

Inorganic growth by WealthTech:

• Objectway: Acquisition of Nest Wealth (January 2024)
• Finax, Acquisition of ETFmatic (January 2024)

Growth capital for WealthTech:

• Wealthon: Successful US$12.4 million debt financing from CVI Dom Maklerski (June 2024)
• Integrum ESG: Successful £100,000 investment from Industrial Thought (April 2024)
• Midas: Successful US$45 million funding round led by Portage (April 2024)
• Unbox: Successful €12 million Series A funding round led by HSBC Asset Management (January 2024)
• ZILO: Successful £25 million Series A funding round led by Fidelity International Strategic Ventures and Portage (January 2024)
• Scalable Capital: Successful €60 million Series E+ funding round led by Balderton Capital (December 2023)
• atomos: Successful equity investment by Willis Towers Watson (July 2023)

Collapse of smaller asset managers

• Ardevora Asset Management: Closure to external clients (January 2024)

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