Acording to Putnam Lovell NBF Securities, companies looking to buy or sell are increasingly looking outside the U.S to do so. Two of the largest deals in the first quarter, the $3.9 billion acquisition of Boston-based Putnam Investments by Canada’s Power Financial Corp. and the TA Associates-led management buyout of Britain’s Jupiter Asset Management for almost $1.5 billion, were cross border aquisitions. -ed.
Cross-border asset management acquisitions pushed the total number of transactions in the first three months of 2007 to 42, compared with 41 in the year-earlier period, as dealmaking spreads globally amid worldwide wealth creation, according to data from Putnam Lovell NBF Securities Inc., a specialist investment bank focused on the financial services industry.
Half of the total number of deals in the first quarter of 2007, 21 of 42, involved cross-border transactions, compared with nine of 41, or 22%, in the year-earlier period, according to Putnam Lovell NBF. Twenty-six, or 62%, of the 42 companies whose takeovers were announced in the first quarter of 2007 are based outside the US, along with 27, or 64%, of the buyers. By contrast, 19, or 46%, of the 41 acquired firms in the first quarter of 2006 were headquartered outside the US along with 21, or 51%, of the buyers.
The two largest deals in this year’s first quarter were cross-border links: the $3.9 billion acquisition of Boston-based Putnam Investments by Canada’s Power Financial Corp. and the TA Associates-led management buyout of Britain’s Jupiter Asset Management for almost $1.5 billion. In total, buyers agreed to spend more than $10.5 billion to acquire over $669.7 billion in assets under management in the 42 deals announced in the first quarter of 2007. In the first quarter of 2006, buyers paid more than $11.3 billion to acquire over $752.7 billion in managed assets - including BlackRock’s trophy takeover of Merrill Lynch Investment Managers, which cost $9.6 billion to add $544 billion in assets.
"Globalization has arrived in full force in asset management,’’ said Ben Phillips, Managing Director and Head of Strategic Analysis at New York-based Putnam Lovell NBF. "We anticipate robust cross-border activity through the balance of 2007 and beyond as strategic and financial buyers seek to build multi-product asset management groups that can compete for clients worldwide.’’
In the first quarter of 2007, non-US targets represented $317.8 billion, or 47%, of the $669.7 billion acquired asset total, compared with $53.9 billion, or 7%, of the $752.7 billion total in the year-earlier period, Phillips said. Notably, there were multiple buyers from Canada, France, Japan, Netherlands, Switzerland and the UK involved in the dealmaking in the first quarter of 2007, and most of those countries were not widely represented in the year-earlier M&A activity.
Some asset management transaction highlights from the first quarter of 2007 include:
* Vibrant activity involving alternatives managers. Eleven of the 42 deals announced featured hedge fund, fund of hedge funds, and private equity targets, compared with nine of 41 in the first quarter of 2006.
* The largest fund management IPO in history - the February New York listing of Fortress Investment Group, which raised $634 million.
* The largest MBO ever in asset management by disclosed deal value - the TA Associates-led buyout of Jupiter Asset Management for almost $1.5 billion.
* The biggest asset management acquisition by a Canadian company - the $3.9 billion takeover of Putnam Investments by Power Financial.
About Putnam Lovell NBF Securities
Putnam Lovell NBF Securities Inc. (“Putnam Lovell NBF”) is an investment banking firm focused on the financial services industry. It offers merger and acquisition advice, merchant banking, equity capital markets, equity derivatives, fixed income trading, and general corporate finance advisory services. It serves a global client base comprised of diversified financial services firms, institutional and mutual fund managers, alternative investment managers, banks, broker-dealers, insurers, and financial technology firms. Putnam Lovell NBF was founded in 1987 and operates from offices in New York, San Francisco, Boston, and London. Putnam Lovell NBF Securities Inc., member NASD/SIPC, has been a subsidiary of National Bank Financial Inc. since 2002. National Bank Financial is a leading Canadian full-service investment bank with more than 3,400 employees and more than 90 offices worldwide. National Bank Financial is the investment banking arm of National Bank of Canada. For more information please visit www.putnamlovellnbf.com.
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