A weekly update on issues important to the Investment Management industry
We’ve been asked to review unsolicited offers to buy an asset management firms many times. As such, we thought it would be worth taking a few blog posts to talk about unsolicited offers, how to approach them, evaluate them, and decide whether to pursue or reject them.
Asset manager M&A activity in 2017, in particular, is on track to reach the highest level in terms of deal volume since 2009.
We think performance fees will likely continue to fall (in one form or another), but, like active management, never be totally eliminated. So on balance, a modestly improving outlook for the sector is probably justified after a rough 2015 and 2016 for most industry participants.
If you only followed the press surrounding asset managers, you’d think the entire industry was in serious trouble. Fee compression, fund outflows, regulatory overhang, rising costs, and a host of other issues have dominated headlines in recent years, yet the market doesn’t seem to care.
This week, we’re sharing some recent media on trends in asset management, including the breakaway broker phenomenon, M&A activity, and the ongoing shift towards passive products.
Piggybacking off of our post from last week, we discuss the various options one faces when leaving a wirehouse firm, including the various pros and cons to doing so. The advisory profession has evolved significantly over time, so we’re writing this post to keep you apprised of your options as you consider the big leap.
Ever since the Financial Crisis, wirehouse advisors have been pondering this question as the independent model continues to lure wealth managers from the big banks and brokerage firms. This post discusses the various options that financial advisors (FAs) are faced with today and when it makes sense for them to stick around or do their own thing.
Of all the topics we cover in RIA Valuation Insights, the most popular concerns what an investment management firm is actually worth. As a consequence, we thought it would be worthwhile to offer a webinar on the topic, and are planning to do so on Tuesday, October 3.
This week we’re sharing some recent media on trends in asset management and the outlook for M&A activity. Most industry observers foresee an uptick in asset manager deal-making as rising costs, asset outflows, and a heightened interest from consolidators incent many firms to pull the trigger on a sale or business combination with another RIA.
If you’re considering an offer for your firm that includes earn-out consideration, think about having some independent analysis done on the offer to see what it might ultimately be worth to you. If you’re working the buy-side, prepare to spend lots of time fine-tuning the earn-out agreement—you won’t get credit if things go well for the seller, but you will get blamed if it doesn’t.
We continue the discussion of earn-outs in the RIA industry. While there is no one set of rules for structuring an earn-out, there are a few conceptual issues that can help anchor the negotiation. We list five in this week’s post.
This blog kicks off a series which we’ll ultimately condense into a whitepaper to explore and maybe demystify some of the issues surrounding earn-outs in RIA transactions. If nothing else, earn-outs make for great stories.
This week, we’re sharing some recent media on trends in the RIA space. We’ve blogged about asset flows, bank interest in the RIA space, the plight of active management, and the fiduciary rule, but these articles represent a deeper dive into each of these topics.
As we do every quarter, we take a look at some of the earnings commentary on pacemakers in asset management to gain further insight into the challenges and opportunities developing in the industry.
We’re always perplexed by the lack of transactions in the RIA industry. Sure, there are some out there, but a typical year reports less than a hundred deals in a space with almost 12,000 federally registered advisors. This means that less than 1% of industry participants transact in a given year. How could that be in an aging profession with a highly scalable business model? We offer a few explanations in this week’s post.
Most traditional asset managers (also sharing the TAM initials), a similarly consistent, yet overlooked subset of the RIA industry, are in bull market territory over the last year in the face of fee compression and continued outflows from active equity products.
All classes of asset managers are off to a decent start in 2017 after a strong end to 2016 as the market weighs the impact of fee compression against rising equity prices.
This week, we take a break in our musings on asset manager valuations and impractical sports cars to share some recent media on trends in the RIA space we’ve been following.
Normally, we would expect strong financial markets to validate most RIA models and at least hide the weaknesses of others. In this case, though, a rising tide isn’t lifting all the boats. Why? In this post, we pinpoint the reasons why and discuss a way forward.
One refrain we often hear from clients is how different they are from other investment management firms. We agree. Asset managers have a lot in common, but we see a huge variety of personalities, investment approaches, business plans, marketing activities, compensation models, etc. In short, every firm has a unique culture, just like families.
The stock market rallied in the first five months of the year, with the Dow Jones and S&P 500 reaching record highs and continuing to climb. Nevertheless, IPOs remain scarce compared to prior years.
A question that we don’t hear enough RIAs asking themselves: what makes our best customer? The conventional wisdom we’ve gathered from talking with a wide variety of investment management firms over the years is that high net worth relationships make the best clients for RIAs. Relationships with individuals are supposed to be stickier than, say, institutional relationships where investment committees drop managers the moment their three-year performance lags the index. However, is it that simple?
As we do every quarter, we take a look at some of the earnings commentary of pacemakers in asset management to gain further insight into the challenges and opportunities developing in the industry.
As part of the analyst community that closely follows developments in the investment management industry, we were disappointed (but not surprised) that Focus Financial Partners pulled their S-1, again, and found a private equity recap partner instead of going public. Picking up on last week’s blog theme, Focus likes to tout their strategy of building an international network of efficiently connected wealth management firms as an “unfair advantage”, but it appears that their real capability is finding capital when necessary to avoid a public offering. Stone Point Capital and KKR bought 70% of the company, enabling prior private equity partners, affiliates who had sold their firms to Focus in exchange for stock, and employees with equity compensation to monetize their positions while Focus remains private.
