November 12, 2012

M&A Deals in Q3 Slowest for 2012: Pershing

Number of transactions down one from Q2, total assets down $18 billion

Mergers and acquisitions slowed down in the third quarter after increasing since the last quarter of 2011, Pershing Advisor Solutions announced Nov. 9. There were just seven acquisitions for firms with at least $50 million in assets under management or $500,000 in annual revenue, down from eight in the second quarter. While the number of transactions fell by just one, total assets of target firms were $6 billion, down from $24 billion in the second quarter. The third quarter was the slowest so far in 2012, according to Pershing.

Buyers by Deal ShareAlthough assets were down significantly, Pershing noted that of the seven transactions that targeted retail-focused RIA firms, three were for firms with more than $1 billion in assets. That brought the median AUM for target firms to $574 million, up from $521 million in the second quarter.

One of those $1-billion-plus firms was The Milestone Group with over $1.3 billion in assets. Denver-based Milestone, which targets clients with at least $2 million in assets, according to the firm’s website, was acquired by BOK Financial Corp. BOK announced the acquisition in August. After the acquisition, BOK will manage nearly $50 billion.

Rampart Investment Management, which is based in Boston, was acquired by Virtus Investment Partners in September and has over $1.4 billion in assets. The acquisition is expected to be completed in the fourth quarter, Virtus announced Sept. 4. With the acquisition of Rampart, Virtus will have about $40 billion in AUM.

Of the seven transactions made in the third quarter, two were from “serial buyers,” or firms that have made three or more transactions in the last four years. United Capital acquired Sanders Financial Management, a Norcross, Ga.-based firm with $222 million in AUM. Mariner Wealth Advisors took a majority interest in the wealth management division of Orizon Investment Counsel, based in Omaha, Neb.

Independent RIAs acquired two firms as well, and two of the transactions were from broker-dealers or accounting firms. The seventh transaction was by a bank or trust. 

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