A weekly update on issues important to the Investment Management industry
Publicly traded hedge fund managers and PE firms nearly doubled in value during 2021. In this week’s post, we review the investment manager performance in 2021 by sector and AUM size and provide implications for your RIA in 2022 based on the results.
The asset management industry fared well in 2021 against a backdrop of rising markets and improved net inflows. Strong performance in equity markets was a major contributor to this performance. In addition, 2021 saw modest organic growth, although there were significant variances by asset class. In this week’s post, we discuss these issues and present our outlook for the industry.
Deal count is projected to reach new highs in the fourth quarter of 2021 as market activity continues to gain momentum, likely rounding out another record-breaking year for the RIA industry. In keeping with the rest of 2021, deal volume was driven by secular trends and supportive capital markets. As market activity remains robust, competition for deals continues to favor RIA aggregators such as Mercer Advisors, Mariner Wealth Advisors, Wealth Enhancement Group, and Focus Financial Partners (FOCS), to name a few. In this week’s post, we provide more information about the aggregators and offer our thoughts for the future.
As year-end approaches, we hope to spread some cheer with our annual RIA Holiday Quiz. There is a chance to win a prize with a perfect score! Don’t forget to supply your contact information so we know who to send the prize to. Merry Christmas!
An RIA’s margin is a simple, easily observable figure that encompasses a range of underlying considerations about a firm that is more difficult to measure, resulting in a convenient shorthand for how well the firm is doing. Does a firm have the right people in the right roles? Is the firm charging enough for the services it is providing? Does the firm have enough–but not too much—overhead for its size? The answers to all these questions (and more) are condensed into the firm’s margin.
Knowing why you’re successful is a key to sustaining success. This week we offer five thoughts on turning your RIA’s success into momentum.
It is never too soon to start thinking about succession planning. There are many viable exit options for RIA principals when it comes to succession planning. This week we discuss six exit options to consider while planning your eventual business transition.
Alternative asset managers have outperformed all other investment manager sectors in the RIA post-pandemic rebound. According to Institutional Investor, eight of the world’s ten largest investment management firms by market capital are now alternative asset managers. In the past month alone, three deal announcements of alternative asset managers by larger, traditional asset management firms and diversified financial institutions suggest the sector remains bullish.
In this week’s post, we discuss these three deals and determine several driving factors in investor demand for alternative assets and for alternative asset management firms.
We’re often asked by clients what the range of multiples for RIAs is in the current market. At any given time, the range can be quite wide between the least attractive firms and the most attractive firms. The factors that affect where a firm falls within that range include the firm’s margin, scale, growth rate of new client assets, effective realized fees, personnel, geographic market, firm culture, and client demographics (among others). In this post, we focus on the client demographics factor, explain how buyers view client demographics, and explore steps some firms are taking to reach a broader client base.
A couple of times a week, we get calls from someone we’ve never met saying they’d like to talk with us about their RIA acquisition strategy. About half are RIAs or trustcos looking for expansion, and the other half are private equity or family offices. Very few are calling because they have a particular target in mind, fewer still have begun the process of negotiating with a potentially interested seller.
If your acquisition strategy these days is starting from scratch, you’re in a tough spot. There’s nothing on the lot, and what is available looks expensive. That doesn’t mean you should give up, though. In this post we offer some practical tips to pursue an acquisition strategy in this market environment, as well as the markets to follow.
