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Despite interest rates continuing to hamper broader US deal and IPO activity, deal volume in the asset and wealth management (AWM) sector remains robust. AWM deal volume over the last 12 months (ended November 15, 2023) dipped about 3% compared to the historically strong market of 2022 (307 deals in the last 12 months versus 316 in 2022) but remained on par with the deal volume seen in 2021 (307 deals). The last six months alone saw several notable transactions of over $500 million announced:
In particular, the acquisition of Sculptor Capital Management, Inc. exemplifies the growing interest in private credit. Over the course of the last 12 months, 10 deals were announced of private credit-focused managers, surpassing the eight mergers in 2022 and five deals in 2021, according to S&P Global Market Intelligence. As discussed further below, the appetite for private credit among investors remains strong amid the current higher-interest rate environment.
Note: The primary M&A data source used in the year-end outlook is S&P Capital IQ. This is a change from our past outlook reports.
“AWM firms aren’t sitting idly, waiting for interest rates to fall. They’ve accepted the reality of ‘higher for longer’ and are looking to strategic partnerships, scaling into new asset classes — in addition to select M&A deals — to accomplish their growth goals.”