The uptick of M&A activity seen at the end of the second quarter continued through July, signaling a rebound in the large-scale and fast-paced market seen throughout 2019, according to Fidelity’s July Wealth Management M&A Transaction report.
In fact, July ended in the highest total deals and client AUM for any two-month period since Fidelity began tracking the activity in 2016. Combined, June and July had 27 deals representing $38.9 billion in AUM, which is also a remarkable jump from the three-month slowdown seen from March through May, when there were only 10 deals representing $4.1 billion in AUM.
Fidelity notes that July’s 13 RIA deals and $18.3 billion in AUM are the highest totals for any July recorded. What’s more, activity in early August suggests there will be continued energy behind getting deals done, the firm suggests.
“The core forces driving the accelerating rates of M&A—readily available capital in a low interest rate environment, succession planning needs, the drive for scale, and improved platforms and talent—are evident in the record two-month period of June and July,” says Scott Slater, M&A specialist and Fidelity Institutional VP of Practice Management & Consulting. “The strong activity seen over the past two months resembles the healthy M&A market experienced throughout 2019,” Slater adds.
Meanwhile, after a record 2019, the IBD space remains quiet with no July deals and only two small transactions since 2020 began, according to the report. But for RIAs, the trend of well-capitalized serial acquirers leading M&A activity has continued. In July, Creative Planning completed its fifth deal of 2020, while Mercer Advisors brought their 2020 total to four deals after closing two during the month.
Hightower Advisors also closed two July deals, bringing the firm to five deals year-to-date. Both CAPTRUST and Dynasty Financial Partners have completed three deals each in 2020. The multi-family office space also had some activity, as Pathstone acquired Seattle-based Cornerstone Advisors and its $4 billion in AUM. Buyers’ interest in minority stake investments also continued, represented by Kudu Investment Management’s investment in $4.7 billion Sequoia Financial Group.
Fidelity’s Wealth Management M&A Transaction Report seeks to capture M&A deals involving:
- wealth management firms registered with the SEC as an RIA including transactions identified with over $100 million in assets under management/advisement, but less than $20 billion;
- breakaway advisors and/or advisory teams who are leaving a financial institution to join a wealth management RIA and who are expected to bring over at least $100 million in AUM/A to the new business; and
- independent Broker-Dealer firms registered with FINRA including transactions identified with over $1 billion in assets under administration.
This article originally appeared on NAPA.
