US Buyers Step Up European Asset Manager Deals

US groups have spent more than $14bn buying asset managers this year, the highest level since records began in 1995, according to data from Dealogic.

As fund groups face pressure on margins, regulatory costs and demand for broader capabilities, US companies have moved ahead aggressively in their pursuit of European asset managers.

The largest deal, Nuveen’s £9.9bn agreement to acquire Schroders, will create a group with $2.5tn in assets across more than 40 markets. JPMorgan Asset Management, which manages $4.3tn, has also argued that scale has become an increasingly important factor in the industry.

US asset managers control almost 47% of European assets, up from 40% five years ago, while US groups hold 64% of the region’s ETF market, according to the Financial Times.

The trend highlights a wider challenge for European firms, which are competing for clients and investment across increasingly global markets. Larger US managers have the advantage of deeper capital bases and the scale to invest across asset classes, technology and different regions.

Baillie Gifford CEO Tim Campbell noted how rising costs and fee pressure were “compressing margins”, while clients were increasingly looking for managers able to provide a broader range of investment capabilities.

"The largest US managers already have that scale so inevitably they’re driving much of the M&A,” he added.

Some managers, such as Xavier Meyer of Aberdeen Investments, have argued that specialization can still provide a competitive advantage for independent firms amid the increasing US presence in European asset management markets.