Despite a weak overall U.S. market for mergers and acquisitions, 2011 is shaping up to be a banner year for M&A in the registered investment advisor industry.
M&A deal activity in the RIA space so far in 2011 totals 44 transactions year to date and $37.7 billion in assets under management compared with 47 transactions and $39.8 billion in AUM at the end of Q3 2010, according to year-to-date figures compiled by Schwab Advisor Services. M&A deals among RIAs saw a record year in 2010, with 109 deals totaling about $156 billion in AUM.
“Aside from last year, this is the strongest three consecutive quarters in a year since we started recording this data. Our industry is in the midst of long-term structural changes that are likely to drive an increase in M&A over the long term,” said David DeVoe (left), Schwab Advisor Services managing director of strategic business development.
This strength in RIA M&A deals comes in contrast to a downward slide in the overall U.S. M&A market, according to data provided by Mergermarket, an independent M&A intelligence service owned by the Financial Times Group. Following a strong start to 2011 with $293.6 billion of announced deals in the first quarter, U.S. M&A activity dropped by over 34% in the following two quarters, with Q2 closing at $191.7 billion and Q3 at US$ 193.6 billion, Mergermarket said in an Oct. 3 release.