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Institutional Investors’ Interest in New Investment Products Is Driving Investment Management M&A, Matt Abbott Tells Law360
April 5, 2024
Global M&A Co-Chair Matt Abbott appeared in a Law360 article, “PE Firms Finding Novel Way To Grow: Merging With Peers,” highlighting the increase in PE firm asset management deals as firms strive to diversify their offerings to compete for limited partner dollars. In the article, published on April 5, Matt discusses a key driver behind recent investment management M&A: very large institutional investors who “want different asset classes” to invest in.
“It's no secret that it's been a tougher fundraising environment, and I think a lot of the dollars that are being allocated from large institutional investors are being allocated to larger funds with multiple product offerings,” Matt tells Law360. To move more quickly to capture that investment capital, some large asset managers are electing to acquire asset managers with different investment offerings, rather than building the new investment products organically—a trend he says he expects to continue.
"If you have a pool of investors who are eager to invest in an existing strategy, growing organically is probably less expensive than buying an existing firm," Matt says. "But, when you acquire another firm and a team with expertise, it is easier to grow more quickly."