NEW YORK – Deals involving asset managers rose in the July to September 2008 period, with the global credit crunch as the backdrop for a jump in divestitures to almost 40% of total sales, up from 23% a year earlier, according to Jefferies Putnam Lovell, the investment banking group of Jefferies & Company, Inc. focused on the asset management and financial technology industries.
Sixty-nine asset manager transactions worldwide were announced in the third quarter of 2008, 33% above the total of 52 in the July to September 2007 period, according to preliminary data from New York-based Jefferies Putnam Lovell. Total assets under management changing hands amounted to $1.0 trillion, more than three times the $300 billion total in the third quarter of 2007. Total disclosed deal value in the third quarter of 2008 increased to $6.4 billion from $6.1 billion a year earlier.
‘’As we anticipated, tremors transforming the global financial landscape have served as a catalyst to asset management deal flow,’’ said Aaron Dorr, a New York-based Managing Director at Jefferies Putnam Lovell. ‘’In the short-term, we expect more banks and other cash strapped financial institutions to retreat from owning money managers, private equity firms to step up their growing involvement in the sector, and consolidation among hedge fund companies and other alternative asset managers as firms grapple with investor redemptions and lack of liquidity. Consistent with the broader financial services industry, the asset management sector is quickly reshaping.’’
Highlights from asset management M&A activity in the third quarter of 2008 include:
• The announced sale of Lehman Brothers fund units, including Neuberger Berman, to Bain Capital and Hellman & Friedman.
• Allianz’s takeover of Cominvest as part of a swap of its Dresdner Bank unit to Commerzbank.
• Fortis’ purchase of the minority stake it didn’t already own in Artemis Asset Management.
• Lazard’s acquisition of the remaining interest in Lazard Asset Management held by the unit’s executives.
• Nippon Life’s purchase of 5% of Russell Investments.
About Jefferies Putnam Lovell
Jefferies Putnam Lovell, the division of Jefferies & Company, Inc. focused on the financial institutions industry, offers a wide range of corporate advisory services, including mergers and acquisitions advice and capital raising. Jefferies Putnam Lovell’s global client base is comprised of diversified financial services firms, institutional and mutual fund managers, alternative investment managers, banks, broker-dealers, insurers, and financial technology firms. Putnam Lovell was founded in 1987 and today operates from offices in New York, San Francisco, and London. Since July 2007, Putnam Lovell has been a division of Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF). For more information please visit www.jefferies.com/jpl
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com)
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