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August 13, 2013 at 10:51 AM
Completed mergers and acquisitions in the registered investment advisor space for the first half of 2013 were the lowest on record in five years, Schwab Advisor Services reported Tuesday.
The first half closed with only 18 completed transactions totaling $15.4 billion in assets under management, which is the lowest on record since the first half of 2008 when 17 deals were completed totaling $24.5 billion, according to data compiled by Schwab Advisor Services. That compares to 25 deals totaling $36 billion in AUM completed in first-half 2012 and 27 deals totaling $20 billion in AUM completed in first-half 2011.
For the second quarter of 2013, deal flow slowed to only five completed deals, though the average deal size increased to $1.9 billion from $447 million in Q1. Thirteen deals were completed in Q1.
RIAs remained the dominant buyer category for the second straight quarter, at 50%, followed by strategic acquiring firms, at 39%. The “other” category stood at 11%, while both regional and national banks had no transactions.
“Fewer mergers and acquisitions are a likely outcome of the rapid rate of organic growth that advisors are currently experiencing,” said Jonathan Beatty (left), senior vice president of sales and relationship management at Schwab Advisor Services, in a statement.
HighTower, Focus Financial, United Capital Are Major Players
As was the case at year-end 2012, national acquiring firms such as HighTower, Focus Financial and United Capital were the dominant M&A buyers in Q2 2013.
In late March, HighTower said MK Wealth Management, an advisory team on Long Island, joined its partnership, representing the 10th time in the past year that a new team has joined the firm, which now includes 33 teams. Focus has seen a spate of acquisitions in 2013, with the most recent one reported in August as Michigan-based Telemus Capital Partners joined Focus.
