Our 16th Global Capital Confidence Barometer indicates record optimism about the outlook of the M&A market among wealth and asset management (WAM) executives. We expect this confidence along with market fundamentals to support strong dealmaking in the sector over the coming months.
M&A confidence at seven-year high
Over two-thirds (69%) of WAM executives surveyed expect to actively pursue acquisitions — a seven-year high. Confidence in the M&A market is bolstered by both an increase in the number of acquisition opportunities, and confidence in closing deals. We expect to see consolidation across the active manager segment as investors move their portfolios to cheaper passive and smart-beta funds.
While almost all (94%) respondents see the global M&A market as either stable or improving over the next 12 months, significant uncertainties remain, with 74% citing a broad range of geopolitical or emerging policy concerns as the greatest risk to their business. Executives are also prepared to walk away from deals: intense competition and disagreement on valuation are the top reasons why asset managers fail to complete deals.
New products and innovation remain top of the agenda
Distribution synergies, along with access to new products and innovation remain top of the boardroom agenda, especially in a sector where organic growth remains a challenge. According to our survey, asset managers will also consider alliances and joint ventures to assess opportunities for investing and partnering with innovative companies to enhance their service offerings.
EY Global Wealth & Asset Management Leader
Transaction Advisory Services
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