Wealth management merger-and-acquisition volume climbed to a new high in 2024 with 366 transactions, 26 more than the 2022 record high and a 14% year-over-year increase, Echelon Partners reported Wednesday.
The average assets per transaction dipped slightly to $1.4 billion from $1.7 billion in 2023, indicating that the surge in deal volume was driven by more smaller transactions, the report said.
However, there were 11 transactions involving more than $100 billion in assets under management, an all-time high for the wealth management industry and six more transactions of that size than in 2023.
Wealth management M&A thrived last year against a backdrop of a global slowdown in M&A markets driven by high interest rates, political uncertainty and fluctuating monetary policies. Buyer competition was intense between sponsor-backed strategic acquirers for add-on acquisitions. For its part, private equity continued to pursue platform investments.
Strategic acquirers dominated the M&A market in 2024, accounting for some 70% of deal activity, with most deals being add-ons by private equity-backed platforms. Private equity firms were involved directly or indirectly in 71% of all disclosed transactions in wealth management M&A, up from 62% in 2023.
Recapitalization activity and direct private equity investments increased last year, and are expected to accelerate in 2025 as investors approach the end of their holding periods and pursue liquidity options, the report said.
WealthTECH deal volume shot up by 37.2% in 2024 to the highest level of transaction activity in industry history, with 138 transactions announced. Many strategic acquirers pursued acquisitions that would expand their service offering.
Meanwhile, financial investors provided significant capital to new platforms, highlighting what the report said is growing demand for technology solutions tailored to RIAs and financial advisors.
The drive for consolidation, fueled by advisors’ succession plans and the benefits of scale, continues to shore up wealth management M&A despite market volatility and interest rate fluctuations, according to the report. Echelon said it expects another year of vigorous M&A activity in 2025, given the highly fragmented market, strong growth potential and a steady pipeline of motivated buyers and sellers.
See the gallery for the 10 largest M&A deals in 2024, as ranked by Echelon according to the amount of assets transacted.
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