Financial services M&A slows

Mergers_and_acquisitionsMerger & acquisition (M&A) activity in the financial services sector shows signs of slowing.

M&A in the asset management industry helped drive a total of 790 deals in the financial services sector in the first half of the year.

But Pitchbook, which gathered the data, said deal-making in financial services was slower than last year, at $161.5 billion (€139.5 billion).

This figure compares to the first-half 2017 figure of $227.6 billion, which was 41% higher and driven by eight “megadeals”.

“One sector not seeing brisk activity is the financial services sector due to changing consumer preferences, a new breed of competitors and increasingly onerous regulations,” said Pitchbook, which has relased its ‘2Q 2018 Global M&A report’. “The segment has been devoid of megadeals—without one closing in the past three quarters, compared to 11 in the preceding three quarters.”

Asset management deals closed this year included the Invesco purchase for $1.2 billion of Guggenheim Investment’s exchange-traded fund business, and WisdomTree spending $1.4 billion to buy ETF Securities.

Pitchbook noted the trend towards passive investment as a driver.

In the wider financial field Pitchbook said although all financial services firms were in a “state of flux”, it was most pronounced in asset management.

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