T Rowe Price is buying credit manager Oak Hill Advisors for up to $4.2bn in cash and shares, in a deal that marks the latest example of consolidation in the asset management industry and illustrates growing appetite for alternative strategies.
The transaction is the Baltimore-based group’s first significant acquisition in more than two decades and one of the larger deals in the global fund management industry’s history.
T Rowe, which has $1.61tn in assets under management and is one of the world’s top active managers, said on Thursday that it will acquire 100 per cent of the equity of New York-based Oak Hill, which has $53bn in assets under management across private, distressed, special situations, liquid, structured credit, and real asset strategies.
Under the terms of the acquisition, $3.3bn is payable at closing, roughly 74 per cent in cash and 26 per cent in T Rowe Price common stock, and up to an additional $900m in cash is payable if certain business targets are reached. The high price reflects big demand for private capital and the competition for deals in the sector.
Bill Stromberg, T Rowe Price chief executive, said in a statement: “Oak Hill meets the high bar we have set for inorganic opportunities, and their proven private credit expertise will help us meet our clients’ demand for alternative credit.”
T Rowe Price’s funds focus on equity, fixed income and multi-asset strategies, and it said it has limited overlap with Oak Hill in terms of investment strategies and clients. Oak Hill will become its private markets platform and the two firms said that they plan to explore expanding into other alternatives strategies in time.
The deal comes as investors turn to private capital strategies in their search for yield in a low-return environment. The overall private capital industry, which includes sectors such as private credit, private equity and infrastructure, grew to $7.4tn at the end of 2020 and is expected to hit $13tn by the end of 2025, according to Morgan Stanley.
Demand for these types of strategies, which offer the prospect of higher returns but charge higher fees and are more opaque, has driven investment groups to hire teams, launch new divisions and hunt for acquisitions. Meanwhile, dealmaking activity has ramped up in the asset management industry, as firms seek scale, tap into new growth areas and curb costs.
So far this year there have been 160 asset management deals globally, worth $25.3bn, according to Dealogic. Last year there were 208 deals valued at a total $54bn.
Oak Hill will operate as a standalone business within T Rowe Price. Its founder and chief executive Glenn August will continue in his role and is expected to join the acquirer’s board of directors and management committee.
The deal is expected to close in the fourth quarter, pending regulatory approval.
Gapping down
In reaction to earnings/guidance:
- BCOV -16.9%, TWLO -14% (also COO to resign, names new COO), NTGR -10.8% (also authorizes repurchase of up to an incremental 10% of shares), RBBN -8.5%, GSHD -8.4%, FLS -5.9%, FLEX -5.6%, UPWK -5.5%, EBAY -5.5%, RE -5.2%, SWK -5%, DBD -5%, AXTI -4.9%, TDOC -4.9%, MD -4.9%, TW -4.7%, RDS.A -4.4%, CLB -4.3%, PLXS -4.1%, SHOP -4.1%, EHC -4%, CMCO -3.9%, NGVT -3.7%, PEGA -3.6%, NOW -3.5%, NVCR -3.4%, AGI -3.3%, EW -3.1%, TFX -3.1%, CDE -2.9% (also also selling its La Preciosa project to ASM), RS -2.8%, CASH -2.7%, MYRG -2.3%, FARO -2.1%, TREE -2.1%, EQT -2%, CARR -2%, NLSN -2%, FORM -1.9%, PPC -1.9%, NEM -1.9%, MCO -1.9%, TROX -1.8%, EXP -1.8%, AR -1.6%, PRLB -1.6%, BAX -1.6%, MO -1.4%, LIN -1.2%, EVTC -0.9% (also selected as the issuer processor of a new payment product for Caja Popular), CTSH -0.9%, INSM -0.9%
Other news:
- RFL -73% (AVENGER 500 Phase 3 clinical trial for CPI-613 did not meet its primary endpoint)
- VWE -5.6% (stock offering)
- RPTX -4.6% (prices offering of 4 mln shares of common stock at $22.00 per share)
- KREF -4.6% (prices offering of 5 mln shares of common stock for gross proceeds of $110.0 mln)
- SESN -3.5% (provides FDA warning letter clarity)
- OSMT -2.7% (stock offering)
Analyst comments:
- BJ -2.9% (downgraded to Neutral from Buy at BofA Securities)
- CAR -2.8% (downgraded to Neutral from Buy at BofA Securities)
- CVI -1.9% (downgraded to Underperform from Neutral at Credit Suisse)
- SHW -1.4% (downgraded to Neutral from Buy at BofA Securities)
- TMX -1% (downgraded to Neutral from Outperform at Robert W. Baird)
Gapping up
In reaction to earnings/guidance:
- LC +34.2%, WOLF +15%, MXL +9.3%, BUD +9.1%, ALGN +8.9% (also announces new study that validates benefits of iTero 5D), CYH +8.8%, UCTT +8.5%, F +8.3% (also co will reinstate dividend starting in Q4), SNBR +7.9%, WPP +7.2%, CCS +6.9%, ETD +4.6%, TYL +4.6%, STM +4.5%, OSTK +4.5%, PI +4.4%, NOK +4.2%, DQ +4.2%, SU +4.1% (also increases dividend and share buyback authorization), KLAC +4%, SCI +4%, BOOT +3.9% (also names new CFO), FCN +3.9%, ADS +3.8%, CLVT +3.7%, LH +3.7%, MC +3.6%, MTH +3.4%, MTLS +3.4%, CG +3.3%, CG +3.3%, HBAN +3.3%, ALSN +2.9%, DRE +2.8%, CMCSA +2.7%, EXR +2.6%, ASX +2.6%, IRBT +2.5%, STC +2.5%, MRK +2.4%, BC +2.3%, XLNX +2.2%, PBF +2.1%, FLWS +2%, ALGT +1.9%, AOS +1.9%, SONY +1.8%, TAK +1.7%, CHX +1.6%, CPG +1.6%, LYG +1.5%, TAP +1.4%, INVH +1.3%, URI +1.3%, RJF +1.1%, HSY +1.1%, MOH +1%, NLY +0.9%, WH +0.9%, SNY +0.9%, TROW +0.9%, YUMC +0.8%, .
Other news:
- HCWB +152.4% (receives FDA clearance to proceed with Phase 1b trial of HCW9218)
- ETON +12.6% (announces that it has acquired U.S. marketing rights to carglumic acid tablets)
- PHAT +7.4% (withdraws public offering due to market condtions)
- TDAC +5.7% (expects $63 mln in cash proceeds from combination with Lottery.com)
- MIME +5.2% (mulling options including potential sale according to WSJ)
- DDD +4% (acquires Volumetric Biotech for up to $400 mln;also expands bioprinting program with UTHR)
- LEV +3.7% (receives purchase order for 39 electric vehicles from Groupe Autocar Jeannois)
- INSE +3.5% (signs contract with MLB Players Alumni Assn)
- VRAY +3.4% (presented new outcomes data demonstrating prolonged survival for inoperable pancreatic cancer patients)
- GSK +2% (GlaxoSmithKline and Pfizer's ViiV Healthcare presents interim data showing for Vocabria and Rekambys)
- QS +1.5% (announces release of third-party test results for solid-state lithium-metal battery cells) .
Analyst comments:
- TER +3.6% (upgraded to Outperform from Market Perform at Cowen)
- ES +2.2% (upgraded to Neutral from Underperform at Mizuho)
- NSC +1.2% (upgraded to Buy from Neutral at BofA Securities)
- PCAR +0.9% (upgraded to Outperform from Neutral at Credit Suisse)
Early premarket gappers
- Gapping up:
- LC +30%, WOLF +15.5%, F +10.5%, PHAT +9%, ALGN +8.7%, MIME +8.1%, SNBR +7.9%, CYH +7.3%, CCS +6.9%, MXL +6.7%, UCTT +5.9%, SU +5.1%, STM +4.9%, ETD +4.6%, TYL +4.6%, KLAC +3.8%, TDAC +3.6%, MTH +3.4%, MC +3.3%, NOK +3.3%, CG +3.2%, CG +3.2%, OSTK +3%, ALSN +2.9%, INSE +2.8%, PI +2.8%, DRE +2.8%, EXR +2.6%, ASX +2.6%, STC +2.5%, DDD +2.3%, GSK +2.3%, XLNX +2.3%, ALGT +1.9%, LYG +1.9%, CTSH +1.8%, CHX +1.6%, GSHD +1.5%, MKSI +1.4%, TAK +1.4%, INVH +1.3%, URI +1.3%, RJF +1.1%, MOH +1%, STLA +0.9%, SONY +0.9%, PPD +0.8%, BOOT +0.8%, SNY +0.8%, AFL +0.7%, PTEN +0.7%, WST +0.7%
- Gapping down:
- BCOV -16.3%, TWLO -12.6%, NTGR -10.8%, RBBN -8.5%, UPWK -6.2%, FLS -5.9%, EBAY -5.9%, VWE -5.6%, FLEX -5.4%, NOVA -5.3%, MD -4.9%, CLB -4.3%, TDOC -4.3%, RPTX -4.2%, KREF -4.2%, PLXS -4.1%, RDS.A -4.1%, NGVT -3.7%, TROX -3.7%, PEGA -3.6%, NOW -3.4%, EW -3.4%, AGI -3.3%, CRVS -3.1%, SWK -3%, OSMT -2.7%, CASH -2.7%, SESN -2.6%, MYRG -2.3%, PRLB -2.2%, FARO -2.1%, FORM -1.9%, PPC -1.9%, EQT -1.9%, AZPN -1.4%, AR -1.2%, CDE -1.1%, AXTI -0.9%, EVTC -0.9%, AEM -0.8%, ACGL -0.8%, WLTW -0.8%, JBT -0.7%, YUMC -0.7%, MSA -0.7%, LIN -0.7%
>>> Up
* Assa Abloy Raised to Buy at Kepler Cheuvreux; PT 285 kronor (+)
* BASF Raised to Buy at Nord/LB; PT 74 euros
* Consti Raised to Buy at Inderes; PT 15 euros
* Corbion Raised to Equal-Weight at Barclays; PT 43 euros
* GVS Raised to Buy at Goldman; PT 14 euros (+)
* K+S Raised to Buy at M.M. Warburg; PT 17 euros (+)
* Leoni Raised to Neutral at JPMorgan; PT 12.10 euros
* Sodexo Raised to Buy at SocGen; PT 93.30 euros (+)
* Spotify PT Raised to $310 from $300 at Barclays
* Spotify PT Raised to $385 from $300 at Pivotal
* Symrise Raised to Hold at SRH AlsterResearch; PT 116 euros
* TESLA TARGET RAISED TO STREET-HIGH $1,300 AT PIPER SANDLER
* TESLA TARGET RAISED TO STREET-HIGH $1,300 AT PIPER SANDLER
* UniCredit Raised to Accumulate at Banca Akros (ESN) (+)
>>> Down
>>> Down
* AKVA Cut to Hold at Norne Securities; PT 95 kroner
* Axactor Cut to Hold at Arctic Securities; PT 9 kroner
* Axactor Cut to Hold at Arctic Securities; PT 9 kroner
* Cancom Cut to Hold at M.M. Warburg; PT 63 euros (+)
* Dufry Indicated 2.6% Higher; ZKB Notes Impressive Free Cash Flow (+)
* FOCUS HOME CUT TO HOLD VS BUY AT BERENBERG, PT EU50
* Incap Cut to Reduce at Inderes; PT 70 euros
* Nordic Semiconductor Cut to Hold at Arctic Securities
* Nordic Semiconductor Cut to Hold at Arctic Securities
* Red Electrica Cut to Underperform at Renta 4; PT 16.28 euros
* Siemens Healthineers Cut to Hold at Kepler Cheuvreux
* Temenos Cut to Equal-Weight at Barclays; PT 130 Swiss francs
>>> Initiation
>>> Initiation
* KMC Properties ASA Rated New Buy at Pareto Securities
* Prosegur Cash Rated New Neutral at Oddo BHF
* Prosegur Cash Rated New Neutral at Oddo BHF
* ReWorld Media Rated New Buy at Kepler Cheuvreux; PT 9.30 euros
* Vitesco Rated New Hold at Berenberg; PT 58 euros
>>> Call
>>> Call
* Beiersdorf’s Guidance Disappoints After 3Q Miss, RBC Says (+)
* Iberdrola Upgraded at Citi on Energy Prices, Underperformance
* Indra Shares Should Rise After Large Ebit Beat: Morgan Stanley
* Lloyds Stock Should Rise on Interest Income, Capital Numbers: MS (+)
* Nemetschek 3Q Numbers ‘Difficult Not to Like,’ Baader Says
* Nemetschek 3Q Numbers ‘Difficult Not to Like,’ Baader Says
* Nokia Shares Seen Gaining on Earnings Beat, Handelsbanken Says (+)
* Ontex Results Suggest Cuts to Consensus Estimates: Jefferies
* Sanofi 3Q Tops Expectations on ‘Very Strong’ Margins: Intron (+)
* SMCP Visibility Limited as Resolution May Take Time: Jefferies (+)
* Solvay 3Q a Beat, Free Cash Flow Guidance Better: Jefferies
* STMicro Earnings ‘Reassuring’ Despite Malaysia Shutdown: Citi (+)
* Telecom Italia Guidance Downgrade is No Surprise, Jefferies Says (+)
* Travis Perkins Had Unexciting Quarter But Trends Improving: Citi (+)
* UMG 3Q Decent, Though Questions on Quality of Earnings: Citi
* Unibail Update Shows More Evidence of Stabilization, RBC Says
* VW Declines Premarket; Jefferies Notes ‘Weak Print as Expected’ (+)
* Wacker Chemie 3Q Cash Flow Strong, Ebitda Ahead: Morgan Stanley
- Nokia (NOA3 TH) +2.3%
- Nokia Repeats Outlook After Stronger-Than-Expected 3Q Report (1)
- AB InBev (1NBA TH) +2.3%
- AB InBev FY Adjusted Ebitda Forecast Beats Estimates
- Admiral (FLN TH) +2.1%
- Airbus (AIR TH) +1.8%
- Airbus Boosts FY Adjusted Ebit Forecast
- Rio Tinto (RIO1 TH) +1.5%
- Watch European Miners With Iron Ore Slumping, Aluminum Sinking
- Shell (R6C TH) +1.3%
- Shell 3Q Adjusted Profit Misses Estimates
- Shell to Start $7 Billion Payout From Proceeds in 2022: TOPLive
- Enel (ENL TH) +1%
- Reckitt (3RB TH) -1%
- Essity (ESWB TH) -1.1%
- Glencore (8GC TH) -1.2%
- Siemens Healthineers (SHL TH) -1.6%
- Siemens Healthineers Cut to Hold at Kepler Cheuvreux
- VW (VOW3 TH) -2%
- VW 3Q Adjusted Operating Profit Beats Estimates
- VW Sticks to Margin Goal After Chip Shortage Hits Output
- IAG (INR TH) -2.1%
- Transatlantic Is a Step for IAG’s Tough Revival: Company Outlook
- Equinor (DNQ TH) -2.7%
- Porsche SE (PAH3 TH) -2.8%
- Nemetschek (NEM TH) -4.6%
- Nemetschek Falls; Analysts Flag High Expectations into 3Q (1)
Asian stocks fell Thursday amid concerns that the recovery from the pandemic will slow as elevated inflation forces tighter monetary policy. Commodities including iron ore and crude oil dropped.
Shares slipped in Japan and China and were little changed in South Korea, where Samsung Electronics Co.’s third-quarter profit exceeded estimates. U.S. and European futures edged up after the tech-heavy Nasdaq 100 touched an intraday record and the S&P 500 dipped but stayed in sight of all-time highs.
Longer term U.S. Treasuries held a rally. Flatter sovereign-yield curves are highlighting growth worries as price pressures stoked by an energy crunch and supply-chain snarls push central banks toward paring accommodation. Australia’s sovereign yields surged after the monetary authority opted against defending its yield target, spurring speculation about a possible policy shift.
Risks from China’s property-market slowdown and crackdown on private enterprise are also still in focus. The yen and gold advanced and resource-linked currencies struggled in a sign of cautious investor sentiment.
Meanwhile, the White House is stepping up pressure on congressional Democrats to finalize a framework for President Joe Biden’s tax-and-spending plan of as much as $2 trillion. On the virus front, cases continue to escalate in a number of countries. Singapore said it’s investigating an “unusual surge” of infections.
In cryptocurrencies, Bitcoin retreated below $60,000, falling further back from the peak of almost $67,000 reached last week.
US After Hours LC +28.1%, F +9%, SNBR +7.8%, ALGN +7.7%, ETD +7.1%, KLAC +3.6% higher on earnings; TWLO -12.7%, NTGR -7.6%, UPWK -6.4%, EBAY -5.5%, NOW -4.3% lower on earnings
Nikkei -0.96% Hang Seng -0.18% CSI -0.67% Shanghai -1.15% Shenzen -1.36%
Eur$ 1.1605 CNH 6.3969 CNY 6.3978 JPY 113.51 GBP 1.3746 CHF 0.9183 RUB 70.5790 RUB 70.5855 TRY 9.5176 WTI$ 81.90-0.92% Gold 1803.75 +0.39% BTC 59,000 +0.16% ETH 4015 +0.82%
S&P +0.13% Nasdaq +0.19% EuroStoxx -0.02% FTSE +0.08% Dax -0.10% SMI -0.08%
Macro :
- U.K. Car Production Plunged 41% in Worse September Since 1982
Keep an eye on :
Macro :
- U.K. Car Production Plunged 41% in Worse September Since 1982
Keep an eye on :
- ABI BB : AB InBev FY Adjusted Ebitda Forecast Beats Estimates
- ABDN LN : Abrdn in Talks to Buy Investment Info Platform Finimize: Sky
- AIR FP : Airbus Boosts FY Adjusted Ebit Forecast
- AKRBP NO : Aker BP 3Q Net Income Misses Estimates (1)
- ALD FP : SocGen Confirms Talks With LeasePlan Owners on Merger with ALD
- ATE FP : Alten Sees FY Organic Revenue Above +10%
- AMG NA : AMG 3Q Ebitda $33.1M Vs. $14.1M Y/y
- AUTN SW : Autoneum Cuts FY Guidance Due to Supply Chain Bottlenecks
- BG AV : Bawag Eyes Rising Dividend Ratio, 3Q Pretax Profit Meet Est. (1)
- BEI GY : Beiersdorf Sees ‘Slight’ Growth in Ebit Margin in 2022
- BCP PL : Banco Comercial Isn’t Interested in Acquisitions, CEO Maya Says
- BFSA GY : Befesa 3Q Ebitda EU34.6M Vs. EU29.3M Y/y
- BONAVA SS : Bonava 3Q Operating Profit Misses Estimates
- CAP FP : *CAPGEMINI RAISES 2021 SALES GROWTH, OPERATING MARGIN TARGETS
- CINT SS : Sweden’s Cint Group to Buy U.S. Analytics Firm for $1.1 Billion
- CTY1S FH : Citycon Narrows FY EPRA EPS Forecast
- CNP FP : Banque Postale Offers EU21.90/Shr for Rest of CNP: M&A Snapshot
- COFB BB : Cofinimmo 9M Adjusted EPS EU5.56 Vs. EU5.24 Y/y
- DAI GY : Daimler to Align Management Board Duties With Mercedes-Benz
- DSY FP : Dassault Systemes Boosts FY Non-IFRS EPS View, Beats Est.
- DRW3 GY : Draegerwerk 3Q Ebit EU47.9M Vs. EU126.7M Y/y
- DUFN SW : Dufry 3Q Revenue Beats Estimates
- EDP PL : EDP Buys Sonatrach’s Stake in Soto 4 Plant as Partnership Ends
- EKT GY : Energiekontor Sells Solar Park to Stadtwerke Heidenheim
- EPROB SS : Electrolux Professional 3Q Ebit Misses Estimates
- EURN BB : Euronav Says No Proposal or Discussion for Merger With Frontline
- FUR NA : Fugro 3Q Adjusted Ebit EU28.8M Vs. EU40.4M Y/y
- GETIB SS : Getinge’s Outlook Now Reflected in Shares, Berenberg Downgrades
- HEIA NA : Heineken Takeover Talks With Distell Prolonged by Investors (1)
- HTWS LN : Helios Towers 3Q Adjusted Ebitda Misses Estimates
- HEXAB SS : Hexagon 3Q Adjusted Ebit Meets Estimates
- HMB SS : H&M Seeking to Close Paris Champs-Elysees Store, AFP Says
- IDIA SW : Idorsia: J&J to Convert CHF110M of Conv Loan to 9.6M Shares
- IDR SM : Indra Boosts FY Ebit Forecast
- JMT PL : J. Martins 3Q Net Income Beats Estimates
- KIN BB : Kinepolis 3Q Change In Attendance +193.1%
- KCR FH : Konecranes 3Q Ebit Misses Estimates
- MMB FP : Lagardere 3Q Revenue EU1.46B Vs. EU1.19B Y/y
- LAND SW : Landis + Gyr Sees 2021 Revenue +7% to +11%
- LD IM : Amalfi Holding in Pact to Buy 63.13% of La Doria Share Capital
- LLBN SW : Liechtensteinische LB to Spend CHF100M on Digital in 5-Year Plan
- LPK GY : LPKF Sees FY Ebit Margin Low End Of 10% to 13%, Saw 10% to 13%
- MIPS SS : Mips 3Q Operating Profit Beats Estimates
- NOKIA FH : Nokia Reiterates Outlook After Stronger-Than-Expected 3Q Report
- NOS PL : NOS Invests EU165.1m to Buy As Much 5G Spectrum As ‘Possible’
- PROT NO : Protector Forsikring to Pay Special Div of NOK1.67 per Share
- REP SM : Repsol to Propose 5% Dividend Increase, Share Redemption
- ROG SW : Roche, Zur Rose Announce Collaboration in Diabetes Offering
- SAN GY : *SANOFI LIFTS FY OUTLOOK, NOW SEES BUSINESS EPS UP AROUND 14%
- RDSA LN : Shell Welcomes Open Dialogue; Will Engage With Third Point
- SKAB SS ; Skanska 3Q Operating Profit Beats Estimates
- GLE FP : SocGen Confirms Talks With LeasePlan Owners on Merger with ALD
- SPK SM : Solarpack Proposed acquisition By EQT Gets CNMV Approval
- STLA I M : Stellantis Sales Drop as Chip Crunch Cuts Third-Quarter Output
- STM FP : STMicroelectronics 4Q Net Revenue Forecast Beats Estimates
- STMN SW : Straumann 3Q Revenue Beats Estimates
- SOLB BB : Solvay Plans to Invest as Much as EU2b in Carbon Neutrality Push
- SUSE GY : SUSE Buys NeuVector for $130M in Cash & Stock
- SCMN SW : Swisscom Cuts FY Net Revenue Forecast
- TEMN SW : Thoma Bravo Is Said to Weigh Bid for Swiss Software Firm Temenos
- TNET BB : Telenet Boosts FY Free Operating Cash Flow Forecast
- TSLA US : Tesla Target Hiked to Street-High at Piper on Margin, Unit Views
- TSLA US : Tesla Target Hiked to Street-High at Piper on Margin, Unit Views
- TIT IM : Telecom Italia Cuts Guidance Amid Competition in Home Market
- TTALO FH : Terveystalo 3Q Revenue Beats Estimates
- TOBII SS : Tobii 3Q Operating Profit SEK0 Vs. Loss SEK27.0M Y/y
- TTE FP : TotalEnergies Profit Jumps More Than Expected as Gas Prices Soar
- UMG NA : Universal Music Sales Grew 16% in First Report After Its IPO
- UCG IM : UniCredit Lifts Profit Target as Lower Provisions Boost Earnings
- URW NA : Unibail Sees FY Adj. Recurring EPS At Least EU6.75, Est. EU7.30
- MAIL LI : VK 3Q Ebitda Beats Estimates
- VOW GY : VW Sticks to Margin Goal After Chip Shortage Hits Output
- VOW GY : *VW 3Q ADJ. OPER PROFIT EU2.80B, EST. EU2.49B
- VOW GY : *VW CUTS FY FORECAST FOR DELIVERIES TO `IN LINE' WITH 2020
- VOS GY : Vossloh 3Q Ebit EU19.8M
- MF FP : Wendel 9M Organic Revenue +12%
- WBD IM : Webuild Wins A$3.3b Construction Contract in Australia
- WPP LN : WPP Lifts Guidance as Ad Sales Jump Past Pre-Pandemic Levels
- XXL NO : XXL 3Q Ebitda Misses Estimates