RIA Valuation Insights

February 16, 2018 Current Events

Q4 Call Reports

Triadic Effects of the New Tax Law

The Tax Cuts and Jobs Act has been especially beneficial to the RIA sector, as lower corporate tax rates has had a positive impact on equity markets, boosting AUM and earnings, which are now taxed at lower rates.  Many firms are still assessing the full impact of tax reform, but what is clear is that lower corporate tax rates in 2018 will give asset mangers increased flexibility in capital management, M&A activity, and technology investment.  As we do every quarter, we take a look at some of the earnings commentary of pacesetters in asset management to gain further insight into the challenges and opportunities developing in the industry.

February 12, 2018 Current Events Practice Management

What RIA Owners Need to Know About the New Tax Law

For this week’s post, we’re offering the slides and recording from our recent webinar on the tax bill’s impact on the investment management community.  On balance, we believe most RIAs are better off as a consequence of the legislation, but there are nuances to the “win.”

February 2, 2018 Current Events

S Corp RIAs Disadvantaged by the Tax Bill

New but Unimproved

We covered much of what we think the new tax bill will mean to RIA valuations in last week’s blogpost – and it’s mostly good news.  The “rest of the story” involves the bill’s impact on shareholder returns for RIAs structured as tax pass-thru entities (S corporations, LLCs, Partnerships), for which the news is not so buoyant.

January 29, 2018 Current Events Practice Management

Are RIAs Worth More Under the New Tax Bill?

Absolutely (Well…Probably)

The tax bill is bullish for the RIA community. Focused on the implications of the tax bill for investment management firm valuations, there’s much to consider as discussed in this week’s post.

January 22, 2018 Trust Companies

Trust Banks Underperform in 2017 Despite Rising Equity Markets & Yield Curve

All three publicly traded trust banks (BNY Mellon, State Street, and Northern Trust) underperformed other categories of asset managers during 2017, and only State Street outperformed the S&P 500.  While all three benefited from growth in Assets Under Custody and Administration (AUCA) and Assets Under Management (AUM) due to strong equity markets in 2017, the trust banks performed more in line with U.S. banks generally during 2017. 

January 15, 2018 Transactions

Industry Consolidation Drives Further Gains in RIA Dealmaking

With no end in sight for the consolidation pressures facing the industry, asset manager M&A appears positioned for continued strength or potential acceleration regardless of which way the markets move in 2018, although a protracted bear market, should it materialize, could highlight consolidation pressures and provide a catalyst for a larger wave of M&A activity.

January 8, 2018 Industry Trends

2017 Was Especially Kind to the RIA Community

Favorable market conditions over the last year have lifted RIA market caps to all-time highs yet again as AUM balances continue to climb with the major indices. Is the press wrong about some of the problems facing the industry or is there more to the story?

January 1, 2018 Alternative Asset Managers Industry Trends

Five Things Bitcoin Tells Us About the RIA World in 2018

While we put off writing about bitcoin, the attention that cryptocurrencies received in late 2017 got our attention as a barometer for trends that will buffet the investment management industry in 2018.  In this post, we highlight five reasons bitcoin matters to all investment managers.

December 25, 2017 Alternative Asset Managers

Mercer Capital Releases Whitepaper on Valuation Issues with Corporate Venture Capital

Our colleagues down the hall who focus on the portfolio valuation side of our services to the asset management community have an extensive new study on the Financial Accounting Standards Board’s guidance for recognizing the fair value of corporate venture capital, or Accounting Standards Update 2016-01. 

December 18, 2017 Practice Management Transactions

Valuing an Offer for Your RIA

The Devil’s in the Details

In this final blogpost on evaluating unsolicited offers for your RIA, we take on this issue of valuing an offer.  Valuing the offer for your RIA can be more difficult than valuing the firm itself.