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Asset and wealth management dealmaking remains robust
Dealmaking momentum remains strong in asset and wealth management (AWM). The third quarter’s 15% increase in activity from the prior quarter was led by a 27% jump in wealth management transactions (75 announced versus 59 in the second quarter). The Federal Reserve’s interest rate cuts are reducing financing costs, increasing the appeal of dealmaking for both strategic and financial acquirers. Buyers are both deploying capital and employing leverage to get deals done. Also propelling activity is the confidence investors have in the benefits of consolidation.
Optimism about the transaction pipeline for the next 12 months is growing amid signals of additional Fed rate cuts. While the number and size of future cuts remain uncertain, further easing is anticipated. Deal momentum also remains strong despite closing timelines that are longer than those seen during the 2021–22 deal activity surge. Dealmakers continue to pursue growth and consolidation opportunities to scale their platforms, acquire new assets under management, and protect operating margins.
Top themes include:
- Retail access to private markets and alternative assets could expand as federal policy shifts.
- Labor Dept. and Securities and Exchange Commission frameworks could open new channels into 401(k)s.
- New vehicles are being designed to integrate private assets into model portfolios and retirement accounts.
- Evergreen funds are the preferred structure for long-term retail participation while active exchange-traded funds (ETFs), interval funds, and semi-liquid hybrids gain traction.
- Partnerships and targeted acquisitions reshape how managers scale distribution and origination in retail and wealth channels.
- Some firms pursue acquisitions and ownership models; others collaborate on joint product development and shared distribution.
- Private credit may struggle to attract AUM as higher rates and tighter liquidity test borrowers’ ability to repay loans.
- Recent negative news forces greater scrutiny of credit underwriting standards, valuation practices, and portfolio transparency as investors reassess manager discipline and question transparency and model resilience.
- Liquidity constraints spur rapid growth in private asset secondary markets as investors seek flexibility and faster capital recycling.
- GP-led continuation vehicles, LP portfolio sales, and evergreen structures expand liquidity options, meanwhile leading firms increase exposure to secondaries through M&A to accelerate platform growth.
- Managers move beyond generative AI pilots to firm-wide transformation, using it in marketing, distribution, and product engineering.
- The focus now is on measurable improvement in efficiency and client experience.
Key M&A trends set to influence asset and wealth management
Shifting investor preferences, rising costs, and fundraising headwinds are converging to create a powerful catalyst for dealmaking. For example, investors are seeking diversified managers offering exposure to infrastructure, real assets, and credit. This shift is spurring a wave of consolidation, minority stake sales, and platform acquisitions to strengthen fundraising competitiveness and operational efficiencies.
“Shareholders are demanding higher returns, investors want more choice, and technology spend requires greater capital investment: these pain points will likely spur more AWM dealmaking.”
Greg McGahan,US Financial Services Deals Leader and AWM Deals LeaderThe bottom line: What AWM dealmakers should watch in 2026
Deal activity in AWM remains robust, underscored by rising transaction volumes and improving financial conditions helped by expected interest rate cuts. The market’s momentum reflects a broader focus on asset growth, product innovation, and consolidation to combat fee pressure. These drivers, plus the potential for expanded retail access to alternative assets, will remain key trends as managers look to access new sources of AUM while maintaining or improving firm profitability.
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