M and A
Investment Management Executives Look To Boost M&A Activity In 2016 - KPMG Survey
Over two-thirds of investment management executives polled by the Big Four accountancy firm plan to make at least one acquisition this year.
Investment management executives will be strongly considering mergers and acquisitions to grow their client base and expand their geographic reach in the year ahead, according to KPMG's annual M&A survey.
An overwhelming 79 per cent of those polled said they plan to initiate at least one acquisition in 2016, up from 63 per cent in last year's survey.
Besides boosting their client base and geographic reach, other M&A drivers cited by respondents included enhancing intellectual property and acquiring new technologies, the survey, US Executives on M&A: Full Speed Ahead in 2016, showed.
“Competition is fierce and even with market volatility we’re seeing favorable asset prices, surplus cash flow and market share consolidation as factors that are helping to drive the increase in M&A activity,” said Sean McKee, lead partner of public investment management. “These firms need to stay aggressive to add market share so, barring a significant economic shock that would force them to leave the cash reserves on the sidelines, acquisition activity should remain hot.”
By far, KPMG said, the US continues to be the top country to invest in, according to 77 per cent of the executives surveyed, up from 67 per cent last year. A third of the respondents (32 per cent) also intend to invest in Western Europe. Asia (excluding China and India) and North America (excluding the US) came in at 15 per cent as other geographic areas under consideration.
Those polled did however also refer to a number of challenges that they anticipate the financial services sector will face this year in deal making, including: valuation disparities between buyers and sellers, uncertainty in the regulatory environment and increased government oversight, and the challenge of identifying suitable targets.
KPMG polled 553 corporate leaders and M&A professionals (including 47 representing the investment management sector) in October 2015.
