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Sector developments – July 2022: Asset/Wealth Administration | White & Case LLP

UK & European Monetary Companies M&A: Sector developments H2 2021 | H1 2022 — Asset/Wealth Administration

With over 350 offers within the European AWM sector in 2021, M&A consolidation exercise is hotter than it has ever been up to now 15 years. Typical knowledge is now beneath the microscope—is greater actually higher?

Overview

Present Market

  • Excessive exercise ranges—no indicators of slowing down

We Are Seeing

  • Market consolidation rumbles on at tempo:
    • Predominantly smaller home alternatives—the UK and Switzerland being focal factors
    • Wholesome sprinkling of medium-sized offers—the UK, the Netherlands and Italy expertise probably the most exercise
    • Few market-defining offers (e.g., Amundi’s acquisition of Lyxor AM and Goldman Sachs’ acquisition of NN Funding Companions)
  • Differing financial institution strategic aims:
    • Some banks go all-in (e.g., UBS’s acquisition of Wealthfront)
    • Different banks fold (e.g., Danske Financial institution’s disposal of its Luxembourg WM enterprise)
  • Specialist sub-sector consolidation:
    • Fund administration (e.g., Abrdn’s acquisition of Interactive Investor)
    • Monetary planning (e.g., Perspective’s quad— acquisitions of Prolific, Evolve, Bowman and Quantum)
  • Tax advisory (e.g., Ludlow’s inside straight draw— acquisitions of Saffron and Constitution)

Key Drivers/Challenges

  • Europe’s asset/wealth managers proceed to imagine consolidation is perfect to:
    • Develop consumer bases and catchment demographic
    • Faucet wider spectrum of asset class choices
    • Safe experience of specialist fund managers
  • Replenished M&A warfare chests of energetic asset managers, particularly these providing sustainable funding merchandise
  • Vital uptick in buyer familiarity with low-cost DIY wealth administration platforms (e.g., FINVIA, TiFIN and EveryoneInvested)
  • Sturdy investor urge for food for Europe’s asset/wealth managers from:
    • Personal fairness buyers (e.g., Apex’s acquisition of Sanne)
    • International buyers (e.g., Federated Hermes’s acquisition of remaining 29.5% of Hermes Fund Managers)
    • Institutional buyers (e.g., £1.2 billion LSE IPO of Petershill Companions)
    • Administration (e.g., Auréus Group’s MBO)
  • Digital asset class behemoths flex M&A muscle (e.g., CoinShares’ acquisitions of Napoleon Crypto and Elwood Asset Administration)
  • Hunt for on ESG-compliant asset class penetration and energetic portfolio administration functionality

Developments to Watch

  • Rising enforcement motion and mis-selling declare danger within the ESG enviornment:
    • Regulators scrutinise asset managers’ sustainable funding disclosures
    • UK asset managers are pressured to publish environmental affect information beneath new Sustainability Disclosure Necessities regime

Our M&A Forecast

Consolidation exercise to proceed, however early indicators that scale and profitability don’t essentially go hand in hand.

Market consolidation

Deal spotlight:

White & Case suggested BNP Paribas Asset Administration, the biggest shareholder of EAB, on EAB’s merger with Evli.

Deal spotlight:

White & Case suggested Catella Group, the Sweden-based fund administration enterprise, on the sale of its remaining 30% stake in Catella Fondförvaltning to Athanase.

The wave of fund supervisor M&A that drove international deal numbers to a document excessive final 12 months has run into 2022, with the worth of transactions within the first 4 months of 2022 its highest since 2018. (Monetary Information, Might 2022)

Deal numbers attain document excessive. There have been 362 M&A offers within the European fund administration sector in 2021—comfortably beating the 279 that have been struck in 2020. (Monetary Information, December 2021)

Funding specialists are starting to query the knowledge of the latest flood of M&A amongst asset managers since they’re typically adopted by fleeing funds and falling share costs. (Monetary Information, October 2021)

Smaller offers between asset managers are working on the hottest tempo in nearly 15 years as companies hunt for tactical acquisitions as a substitute of larger, riskier purchases. (Monetary Instances, September 2021)

Bigger:

  • EAB & Evli (Finland): Merger (Might 2022)
  • Aviva (UK): Acquisition of Succession Wealth (March 2022)
  • Amundi (France): Acquisition of Lyxor Asset Administration (January 2022)
  • Goldman Sachs (Netherlands): Acquisition of NN Funding Companions (August 2021)

Mid-sized:

  • Banca March (Spain): Acquisition of BNP Paribas Personal Banking Spain (February 2022)
  • M&G (Switzerland): Acquisition of 90% of duty Investments (February 2022)
  • River&Mercantile & AssetCo (UK): Merger (January 2022)
  • Kingswood Holdings (UK): Acquisition of Metnor Holdings (January 2022)
  • Raymond James (UK): Acquisition of Charles Stanley (December 2021)
  • Schroders (UK): Acquisition of 75% of Greencoat Capital (December 2021)
  • LGT (Australia): Acquisition of Crestone Wealth Administration (December 2021)
  • Schroders (UK): Acquisition of River & Mercantile’ options division (October 2021)
  • Cardano (Netherlands): Acquisition of ACTIAM (October 2021)
  • BNP Paribas Asset Administration (Netherlands): Acquisition of majority stake in Dynamic Credit score Group (September 2021)
  • Max Matthiessen (Sweden): Acquisition of Naventi Fonder (September 2021)
  • Abrdn (UK): Acquisition of EXO Investing (August 2021)
  • Zurich (Italy): Acquisition of Deutsche Financial institution Monetary Advisors (August 2021)
  • Raymond James Monetary (UK): Acquisition of Charles Stanley Group (July 2021)
  • Poste Italiane and Intesa Sanpaolo (Italy): Acquisition of 40% of Eurizon Capital Actual Asset (July 2021)
  • Mattioli Woods (UK): Acquisition of Maven Capital Companions (July 2021)

Smaller:

  • Tern (UK): Acquisition of Pires Investments (June 2022)
  • Grupo Mutua (Spain): Acquisition of 24.41% of Alantra Wealth Administration (Might 2022)
  • Tatton Asset Administration (UK): Acquisition of fifty% of 8AM World (April 2022)
  • Sienna Funding Managers (France): Acquisition of Acofi Gestion (March 2022)
  • Verso Wealth Administration (UK): Acquisition of CDC Wealth Administration (March 2022)
  • Magellim (France): Acquisition of Turgot Capital (February 2022)
  • Kingswood Holdings (UK): Acquisition of Joseph Lamb (February 2022)
  • Athanase (Sweden): Acquisition of remaining 30% of Catella Fondförvaltning (February 2022)
  • Gonet & Cie (Switzerland): Acquisition of Banque Degroof Petercam (January 2022)
  • Decisive Capital Administration (Switzerland): Acquisition of Artorius Wealth Switzerland (January 2022)
  • Vontobel (Switzerland): Acquisition of UBS Swiss Monetary Advisers (December 2021)
  • Canaccord Genuity Group (UK): Acquisition of Punter Southall Wealth (December 2021)
  • Liontrust (UK): Acquisition of Majedie Asset Administration (December 2021)
  • Kingswood Holdings (UK): Acquisition of Metnor Holdings Restricted (November 2021)
  • Kingswood Holdings (UK): Acquisition of Cash Issues (North East) (November 2021)
  • Primevest Capital Companion (Netherlands): Acquisition of Holland Immo (November 2021)
  • Hottinger (UK): Mixture with Edmond de Rothschild’s UK wealth administration operations (October 2021)
  • Kepler Cheuvreux (France): Acquisition of Ellipsis Asset Administration (October 2021)
  • ODDO BHF Asset Administration (France): Acquisition of METROPOLE Gestion (September 2021)
  • Storebrand (Denmark): Acquisition of Capital Funding (August 2021)
  • Titan Wealth (UK): Acquisition of Titan Asset Administration (August 2021)
  • REYL & Cie (Switzerland): Acquisition of 40% of 1875 Finance (August 2021)
  • AssetCo (UK): Acquisition of majority stake in Rize (July 2021)
  • AssetCo (UK): Acquisition of 30% of Parmenion Capital Companions (July 2021)

JVs:

  • Sienna Funding Managers: French asset administration JV with Malakoff Humanis (March 2022)

Excessive investor urge for food

Deal spotlight:

White & Case suggested Oaktree Capital Administration on its acquisition of UK non-public wealth administration and funding companies, Sanlam Wealth.

PE companies have been shopping for up corporations that advise people on their wealth, surging to a document 223 in 2021. (Monetary Instances, December 2021)

Monetary sponsors (acquisitions):

  • Beka Finance/Gala Capital (Spain): Acquisition of Trea Asset Administration (Might 2022)
  • Motive Companions and Clearlake Capital (UK): Acquisition of BETA+ (March 2022)
  • Apex Group (UK): Acquisition of Sanne (August 2021)
  • Bonaccord Capital Companions (UK): Minority fairness funding in Park Sq. Capital (January 2022)
  • Oaktree Capital Administration (UK): Acquisition of Sanlam Wealth (September 2021)
  • Cinven Companions (UK): Majority (undisclosed) fairness funding in True Potential (September 2021)

Monetary sponsors (WealthTech funding rounds):

  • Hamilton Lane (WealthTech): Participation in US$47 million Collection C funding spherical for TIFIN (October 2021)

Monetary advisers/Funding banks:

  • Stephens Monetary Companies (Asset administration): Acquisition of 20% of CRUX Asset Administration (April 2022)

International buyers:

  • HPS Funding Companions (UK): Fairness funding into Nucleus Monetary Platforms (March 2022)
  • Agilis (US): Acquisition of River and Mercantile’s US options enterprise (January 2022)
  • Federated Hermes (US): Acquisition of remaining 29.5% of Hermes Fund Managers (August 2021)

Market urge for food:

  • Petershill Companions: £1.2 billion LSE IPO (September 2021)

MBOs:

  • Auréus Group (Netherlands): MBO (January 2022)
  • Wergen & Companion Wealth Administration (Switzerland): MBO (January 2022)

Differing FI prerogatives

UK buyers turned their backs on passive funds in July 2021, favouring actively managed sustainable funding merchandise which chalked up one in all their finest months on document. (Monetary Information, August 2021)

Tag-out (disposals):

  • Julius Baer: Disposal of Fransad Gestion (June 2022)
  • Sovcombank: Disposal of Septem Capital (February 2022)
  • Julius Baer Group: Disposal of Wergen & Companion Wealth Administration (January 2022)
  • Société Générale: Disposal of Lyxor Asset Administration (January 2022)
  • UBS: Disposal of UBS Swiss Monetary Advisers (December 2021)
  • Deutsche Financial institution: Disposal of Deutsche Financial institution Monetary Advisors (August 2021)
  • BNP Paribas: Disposal of ClimateSeed (July 2021)
  • Danske Financial institution: Disposal of Luxembourg wealth administration enterprise (July 2021)

Tag-in (acquisitions):

  • Royal Financial institution of Canada (UK): Acquisition of Brewin Dolphin (March 2022)
  • ANZ (UK): US$50 million fairness funding in Pollination (February 2022)
  • Graubündner Kantonalbank (Switzerland): Acquisition of 30% of Twelve Capital (January 2022)
  • Financial institution Syz (Switzerland): Acquisition of BHA Companions (January 2022)
  • UBS (US): Acquisition of Wealthfront (January 2022)
  • HSBC (India): Acquisition of L&T Finance’s Indian mutual funds enterprise (December 2021)
  • Banco Desio e Brianza (Italy): Acquisition of 15% of Anthilia Capital Companions (November 2021)
  • Renell Financial institution (Belgium): Acquisition of Advantage Capital (October 2021)
  • HSBC Asset Administration (US): Acquisition of minority stake in RadiantESG (July 2021)
  • Union Bancaire Privée (Luxembourg): Acquisition of Danske Financial institution’s Luxembourg wealth administration enterprise (July 2021)

Monetary planning M&A

Monetary sponsors:

  • Nordic Capital (UK): Acquisition of Ascot Lloyd (April 2022)
  • Andera Companions (France): Acquisition of (undisclosed) fairness stake in Patrimmofi (September 2021)
  • Lightyear Capital–backed MBO (UK): Acquisition of Wren Sterling from Palatine Personal Fairness (July 2021)

Commerce consolidators:

  • Groupe Crystal (France): Acquisition of CP Conseils Finance (December 2021)
  • M&G (UK): Acquisition of Sandringham Monetary Companions (August 2021)
  • Perspective Monetary Group (UK): Acquisition of Prolific Monetary Companies (August 2021)
  • Perspective Monetary Group (UK): Acquisition of Evolve Monetary Administration (August 2021)
  • Perspective Monetary Group (UK): Acquisition of Bowman Monetary Planning (August 2021)
  • Perspective Monetary Group (UK): Acquisition of Quantum Portfolio Administration (August 2021)
  • Lloyds (UK): Acquisition of Embark (July 2021)

Fund administration M&A

Deal spotlight:

White & Case suggested JTC, the worldwide skilled companies enterprise, on its acquisition of Important Fund Companies, the non-public capital fund administration companies specialist.

The company and fund companies area has seen comparatively constant numbers of transactions involving Europe-based targets over the previous couple of years, and information means that the pattern will proceed. (Mergermarket, July 2021)

  • ZEDRA (US): Acquisition of Atlas Fund Companies (April 2022)
  • Apex Group (UK): Acquisition of majority stake in Fund Admin Chain (March 2022)
  • Abrdn (UK): Acquisition of Interactive Investor (December 2021)
  • JTC (USA): Acquisition of Important Fund Companies (December 2021)
  • Apex Group (UK): Acquisition of Sanne (August 2021)
  • Sanne (Isle of Man): Acquisition of PraxisIFM’s funds administration enterprise (July 2021)
  • IQ-EQ (Eire): Acquisition of Davy World Fund Administration (July 2021)

Tax advisory M&A

  • Ludlow Belief (UK): Acquisition of Saffron Tax Companions (April 2022)
  • Ludlow Belief (UK): Acquisition of Constitution Tax (April 2022)

Debt servicing/NPL administration

  • Cerved Credit score Administration (Italy): Acquisition of Rev (June 2022)
  • Dunya Varlik Yonetim, Hisar Stratejik Yatirimlar Holding & Merkez Alacak Yonetimi Danismanlik ve Destek Hizmetleri (Turkey): Merger (April 2022)
  • Collextion (Italy): Acquisition of Whitestar (April 2022)

Asset administration within the digital world

  • Caceis (France): Digital asset custody JV with Taurus (June 2022)
  • CoinShares (France): Acquisition of Napoleon Crypto (December 2021)
  • Afry (Sweden): Acquisition of Trivalo (October 2021)
  • Tatton Asset Administration (UK): Fund administration JV with Fintel (September 2021)
  • Normal Chartered (UK): Cryptocustody JV with Zodia Custody (July 2021)
  • CoinShares (UK): Acquisition of Elwood Asset Administration Companies (July 2021)

Digitalisation marches on

  • Amundi: Acquisition of Finventum (June 2022)
  • Moneybox: Profitable £35 million Collection D funding spherical led by Constancy Worldwide Strategic Ventures (April 2022)
  • FINVIA: Profitable €20 million funding spherical led by HANNOVER Finanz (March 2022)
  • M&G: UK direct investments JV with Moneyfarm (January 2022)
  • TiFIN: Profitable US$47 million Collection C funding spherical led by Hamilton Lane (October 2021)
  • EveryoneInvested: Spare change funding JV with Mastercard (September 2021)
  • Sensible: WealthTech JV with BlackRock (September 2021)

Click on right here to obtain ‘Monetary establishments M&A: Sector developments — Different FS’ PDF

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