Data & Research July 27, 2012

M&A Deal Flow Stayed Steady in First Half

The first half of 2012 saw 25 deals completed, totaling about $36.2 billion in assets under management, according to Schwab Advisor Services Reports.
Reported by

Industrywide data on registered investment adviser (RIA) mergers and acquisition (M&A) activity from Schwab details total transactions and average deal assets under management (AUM) for the first half of the year.

“RIA M&A deal flow has remained steady during the first half of 2012, recording just slightly fewer transactions than the same period last year,” said Jon Beatty, senior vice president, sales and relationship management, Schwab Advisor Services. “While the second quarter slowed a bit in terms of the number of completed transactions, we’ve seen a big jump in the average deal size so far this year, indicating the overall strength of the RIA segment.”

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Highlights include:

 

  • The average deal had assets under management of $1.4 billion;
  • Eight completed transactions in the second quarter for a total of $12.3 billion in AUM; and
  • National acquiring firms are the dominant buyer category, closing three transactions in the second quarter and approximately 50% of the total deals since the fourth quarter of 2011.

Schwab’s M&A data focused on investment advisory firms that predominantly serve high-net-worth retail investors, firms with at least $50 million in AUM and breakaway brokers from wirehouses who received consideration for joining an RIA.

Schwab began tracking M&A transactions in 2004.

 

The Markets July 27, 2012

Equities Lose 401(k) Participant Assets in June

Defined contribution (DC) plan participants transferred monies from equities into fixed-income investments in June despite the market rally, according to the Aon Hewitt 401(k) Index. 
Reported by

Overall, 67% of the month’s days had transfer activities that favored fixed-income funds during the month. In sum, $253 million transferred out of diversified equities (excluding company stock) into fixed-income investments. 

Large U.S. funds lost the largest amount—$84 million (30% of transfers)—followed by small U.S. funds ($60 million, 21%) and premixed funds ($42 million, 15%). International funds and balanced funds also had net outflows of $41 million and $22 million, respectively.

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On average, equity exposure was up 0.3% to 59.3% at the end of June. This is down slightly from 60.6% at the beginning of the quarter.

More information is available here.

 

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