Alternative credit M&A on the rise
A record number of deals have been taking place in the asset management space, with a particular focus on alternative credit, as firms go after higher revenue-generating businesses during a period where active management has come under increasing pressure.
The latest announcement came from Janus Henderson, a traditional asset manager, which recently announced its acquisition of global private credit manager Victory Park Capital, which has assets under management (AUM) of $6bn (£4.6bn).
Back in July, Seviora Group, an asset manager owned by Singapore’s Temasek, acquired a stake in credit manager ADM Capital. And Blue Owl Capital bought Atalaya Capital Management for $450m. Meanwhile, BNP Paribas is acquiring AXA Investment Managers.
Many in the sector expect deal activity to continue and for there to be further consolidation.
“There is one big central theme, which is that apart from private equity until recently, there has been no other place in asset management that’s been growing as quickly as alternative credit,” said Chris Acito, founder and chief executive of Gapstow.
“If you consider the last five to eight years of asset management, there hasn’t been a lot of growth, particularly if you’re talking about traditional active management.
“If you’re the owner of an asset management firm you need to be thinking about how you gain exposure to this space. That’s driven a lot of the traditional managers to look at making acquisitions.”
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Meanwhile, alternative credit managers are looking at how they can become bigger, and joining a larger firm gives them the ability to build scale and scope, Acito said.
“I think it is becoming increasingly important in this stage of their evolution,” he added. “You can bring together multiple investment capabilities, you have the scale to support the marketing efforts in the retail world, which takes a lot of people and you don’t do that if you’re a smaller manager.”
According to Gapstow’s annual research, 2023 was a record year for alternative credit M&A with 32 transactions, up 36 per cent year-on-year, acquiring companies with a total AUM of $284bn.
