AWM dealmaking rises despite macro uncertainty

Key findings

• Structural liquidity mismatches are emerging as key pressure points for semi liquid funds amid broader credit concerns.

• Investor demand for private credit beyond direct lending remains healthy despite ongoing concerns about software-focused lending.

• AI investment is increasingly focused on operational efficiency, while client-facing AI improvements vary by investor segment. 

• Wealth management consolidation is increasingly focused on differentiated capabilities and platform integration rather than pure scale.

• General partner (GP) staking markets continue to mature as more managers pursue sales and realization pathways expand.

Top themes and developments in the AWM sector in recent months include:

• In semi-liquid vehicles, a structural liquidity mismatch is the more significant issue rather than the credit concerns that grab news headlines. Wealth channel investors are reassessing how periodic redemption features align with the illiquid nature of private market assets, while institutional capital appears to remain structurally committed to traditional drawdown structures. Elevated redemption demand is spurring faster development of both secondary markets and discount opportunities as retail investors seek liquidity.

• Concerns around potential AI disruption facing certain software-focused private credit investments are contributing to increased investor interest in non-corporate private credit strategies, including asset-backed lending and specialty finance, where managers continue to see opportunities for differentiated yield and alpha generation. This is driving capabilities-focused M&A across origination platforms, servicing infrastructure, and specialized financing capabilities.

• AI investment remains focused on operational efficiency, with most firms prioritizing compliance, reporting, and workflow automation over fully AI-driven client experiences. Adoption is likely to vary by client segment, as general retail investors may be more receptive to AI-enabled advisory models while ultra-high net worth (UHNW) clients continue to value human relationships and specialized advice. 

• Wealth management consolidation continues, with PE-backed consolidators accounting for a meaningful share of wealth acquisitions, often executing programmatic roll-up strategies and increasingly prioritizing platform quality, differentiated capabilities, and integrated operating models over pure AUM scale.

• Fee compression and fundraising headwinds continue to drive consolidation among subscale managers as allocators concentrate capital with fewer top performers. However, AWM buyers continue to evaluate the balance between niche specialization and scale alone, with both strategies supporting attractive investment theses. Highly specialized managers can offer differentiated alpha, access to less crowded opportunities, and stronger investor appeal in targeted strategies, while scaled platforms provide broader product diversification, operating leverage, and greater resilience when performance or fundraising conditions weaken in a particular asset class.

Two forces are poised to shape AWM dealmaking over the next six months: managers’ continued pursuit of expanded capabilities, and the continued maturation of the GP staking market.

Managers pursue expanded capabilities

AWM deal activity is expected to remain shaped by managers seeking expanded capabilities in response to fee pressure, margin compression, and demand for higher growth, higher-margin products. As organic growth remains challenging, acquisitions can provide a faster path to new investment strategies, distribution channels, geographic reach, and technology-enabled operating capabilities.

Managers with specialized strategies, diversified distribution, scalable platforms, and broader geographic footprints are likely to remain attractive targets. Secondaries capabilities are one example of this trend, as liquidity pressures across private markets drive greater use of GP-led continuation funds and other secondary solutions. These dynamics are creating pricing gaps, differentiated sourcing opportunities, and increased demand for specialized execution capabilities. As investors seek liquidity and private asset holding periods extend, firms with scalable secondaries expertise will likely become increasingly attractive acquisition targets.

GP staking activity accelerates as liquidity pathways expand

GP staking activity continues to accelerate as more managers consider sales and realization activity increases across maturing vintages. The continued growth in activity is driven in part by aging founders working out succession plans as well as increasing demand for strategic capital to support firm expansion, product diversification, and institutionalization initiatives. Activity is also being supported by maturing GP stake fund vintages, as GP stake platforms increasingly pursue realizations and distributions to investors. Expanding exit pathways including strategic M&A, continuation vehicles, sponsor-to-sponsor transfers, and management buybacks are contributing to a more active and increasingly liquid market for GP ownership interests.

AWM dealmaking remains resilient as structural tailwinds continue to outweigh macroeconomic uncertainty. Fee pressure demanding scale, acquirers looking to expand product offerings and enhanced capabilities, as well as AI and technology investment becoming increasingly important levers for efficiency, client experience, and competitive differentiation are shaping buyer priorities. Successful acquirers will be those that pursue disciplined, capabilities-led M&A which expands products, channels, and technology in ways that create durable value.

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