Asset management’s M&A booms
Two new deals from Vanguard and Victory Capital last week underscored the pace of consolidation reshaping the global asset management industry, as investment groups rush to expand, writes Harriet Clarfelt.
Index-tracking fund titan Vanguard, which has $12tn in assets under management, revealed it would acquire AI-wealth platform Altruist for an undisclosed sum, pointing to the benefits of technology in helping advisers serve more clients.
Separately, Victory Capital, the Texas-based investment house that lost out in the race to buy Janus Henderson earlier this year, said on Wednesday that it would scoop up asset manager First Eagle for $7bn.
Those transactions come as a wave of consolidation ripples across the global asset management industry, with fund firms seeking scale and breadth across geographies and asset classes. Global asset management deal volumes have already reached $53.8bn year to date, the highest figure on record since at least 1995, according to data from Dealogic.
In Vanguard’s announcement on Wednesday, chief executive Salim Ramji said that “far more people could benefit from access to financial advice than the industry can serve today,” and “technology can help close that gap by enabling advisers to serve more people and serve them better, while preserving the human judgment and relationships at the centre of good financial advice”.
Victory, meanwhile, said its acquisition of New York-based First Eagle — with $222bn of assets under management — would create a $571bn fund firm, “positioning Victory Capital as one of the largest publicly traded traditional asset managers in the US”.
Nelson Peltz’s Trian Fund Management, together with investors led by venture firm General Catalyst, ultimately won the bidding war for Janus Henderson this year, with an $8bn all-cash offer, after Victory unexpectedly swooped in earlier with a rival proposal.
Victory’s latest deal combines $4.4bn in cash and $2bn in newly issued shares, with Victory also taking on $575mn of First Eagle bonds expiring in 2032. That is well above the roughly $4bn that First Eagle’s private equity owners Genstar had paid. That deal had only closed about a year ago.
When it dropped out of the bidding war for Janus Henderson in late March, Victory said its “acquisition strategy has not changed”.