RIA M&A expert David DeVoe kicked off his annual DeVoe & Company M&A + Succession summit with the message that a few mega-firms will likely break away from the pack.
‘The RIA industry is going through a natural period of consolidation, but I don’t think we’re going to see massive consolidation from 10,000 firms down to two or one or five or eight or ten,’ said DeVoe (pictured). ‘But we are starting to see consolidation at the top.’
RIA M&A activity has surged after a brief slowdown in the spring when the coronavirus pandemic first roiled equity markets. According to data compiled by DeVoe’s eponymous valuation consultancy, RIAs pulled off a record 44 mergers in the third quarter of 2020.
Yet DeVoe & Company found that dealmaking for RIAs with less than $1bn in assets through the first three quarters of the year is actually down relative to 2019. RIAs with less than $1bn in assets have completed 67 transactions so far in 2020, compared to 68 through the first three quarters of 2019.
Meanwhile, dealmaking among RIAs with more than $1bn in assets is up 48% year over year. RIAs of that scale have pulled off 44 deals through the first three quarters of 2020 relative to 30 through the first three quarters of 2019.
‘These are organizations that are going to run their business better than any RIA in the industry,’ DeVoe said.
