The Year Ahead in Industry Consolidation

A report in the Financial Times explores the state of mergers and acquisitions in the asset management industry and predicts that investors want to see more firms joining together in 2021. Consolidation has led to cost savings for firms and can appeal to large institutional managers who may wish to deal with fewer managers that offer a broader mix of products, the report said. The report also notes the challenges from consolidation – different firm cultures and structures have erected challenges for successful integrations. The MFDF will host a webinar with lawyers from Simpson Thacher in March on how boards can approach and be prepared for more of these mergers. Additionally, EY recently released a white paper “How Boards are Overseeing the Streamlining of Asset Managers.” The paper is partly informed by a Forum webinar presented by EY experts and covers topics such as competitive factors in fee setting, oversight and due diligence when selecting merger partners, and transparency in share class structures. The Forum has also published white papers on fund mergers and adviser combinations, available here.