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Freeman & Co.


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News Release
For Immediate Release FREEMAN & CO. REPORTS ASSET MANAGEMENT M&A ACTIVITY AND FORECASTS 2013 DEAL ACTIVITY TRENDS NEW YORK, June 4, 2013 – Freeman & Co., a leading independent advisor to the financial services industry, released the 25th edition of its asset management industry overview covering transaction activity and the changing market environment, including the growth of outsourced CIOs and retail alternatives. Freeman & Co. reports 51 asset management deals were announced globally in the first four months of 2013, representing a 12% annualized increase over 2012 and marking the second year of double-digit growth in deal activity. In the first four months of 2013 the stock market rallied to record highs and traditional and alternative asset managers in general beat the S&P 500 over the past year. “The asset management landscape is evolving. Private equity firms are focused on becoming asset managers; large long-only and traditional managers are becoming multi-asset solutions providers; and other creative asset managers are focused on defining a niche. As these firms converge, we could see as many as 150 asset management transactions in 2013,” says Eric Weber, Managing Director and COO at Freeman & Co. LLC. In summary, the report details the following:

Deal Activity/M&A: At 51 transactions through April 30 (or 153 annualized), 2013 is on track to be the second year of double-digit increases in M&A activity. As of April, this represented a 12% annualized increase over 2012. In 2012, global deal activity included 137 transactions, a 22% increase over 2011. Evolving Asset Management Landscape: Nearly five years after the market crash in 2008, asset levels have surpassed pre-crisis levels in most developed markets. Unlike the previous market crash in 2002, when returns were supplemented by 3 – 5% annual inflows, this time net inflows remained flat or slightly negative across most traditional asset classes, up until the recent equity market run in the first quarter of 2013. In this report, we highlight different ways firms are seeking growth in a converging asset management environment. We have identified four key themes managers should consider in 2013: solutions, focus on outcomes (for institutional managers), importance of scale (for retail managers), and the convergence in alternative asset classes. Outsourced CIOs: Outsourced CIOs offer a hybrid solution to investment consultants and manager of manager investing. The defined outsourced CIO market has grown at a ~20% CAGR over the last five years, and continues to grow rapidly. While corporate pensions represent an estimated 52% of the current client base, future growth is expected to come from small and mid-sized endowments and foundations as well as firms specializing in catering to high net worth individuals and families. As new firms redefine their business models as “Outsourced CIOs”, a diverse group of specialized OCIO managers have emerged. M&A activity in this space is in its early stages, with a few private equity led transactions occurring to date. Alternatives for the Retail Market: Retail alternative products have experienced tremendous tailwinds in recent years, from both an investor demand perspective and from traditional and alternative managers eager to supply product. In the last six months alone, Franklin Templeton, Fidelity and

Alternative firms. +1 212 830 6162 underwriting. have recently filed for or have launched products targeting mass affluent investors. CFA Managing Director & COO Freeman & Co. As the success of these new ventures becomes apparent. and in some cases. such as KKR. capital raising. Freeman & Co. visit www. M&A. we expect to see continued activity in this space. has diversified into one of Wall Street's premier providers of independent financial services advice offering mergers and acquisitions and related advisory services. # # # For a full copy of the report or further information please contact: Eric C.Oppenheimer partnered with alternatives firms to create new products to distribute through existing channels. Apollo and Blackstone. . strategic management consulting and competitor benchmarking data and analysis to the entire spectrum of financial institutions. For more information. by means of new product launches. About Freeman & Co. joint ventures. LLC Founded in 1991. Carlyle.