Asset management fuelled by M&A deals

Asset management mergers and acquisitions soared in 2005, according to new research.

A new report by a leading investment bank reveals that the value of disclosed transactions more than doubled, from $8.2 billion in 2004 to $17.5 billion last year.

Putnam Lovell NBF Securities claims that the amount of acquired assets under management leapt in 2005 from $729 billion to a whopping $1.1 trillion for the first time in five years.

The total number of global sales of investment management companies fell over the year from 157 to 134.

Putnam Lovell claims that the growth in mergers and acquisitions in the sector was fuelled by a shift towards strategic repositioning and predicts that 2006 could mark the most active year to date for asset management sales, boosted by demand for retirement investments and more complex products.

The report highlights the recently announced takeover of Merrill Lynch asset management business by BlackRock as evidence of the current trend.

Putnam Lovell managing director, Benjamin Phillips, said: "We anticipate that a number of vertically integrated fund management systems worldwide - proprietary funds linked with captive distribution - may now break apart in the near future."

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