Dealmakers cautiously optimistic on asset and wealth management M&A
Global asset and wealth management is expected to see further M&A activity this year, with deal values in Asia-Pacific rising more than 70 per cent in 2024, according to PwC.
The professional services firm’s Global M&A Trends in Financial Services: 2025 Outlook exhibited cautious optimism for an uptick in global financial services M&A activity this year, thanks to the return of megadeals and rising deal values.
According to PwC, megadeals are defined as deals greater than US$5 billion ($8 billion) in value.
“Dealmakers are optimistic about M&A in the financial services sector for 2025, building on the momentum created in 2024, which saw an increase in megadeals and growth in deal values, despite continued low deal volumes,” wrote Christopher Sur, PwC’s global financial services deals leader.
Deal values surged by 76 per cent in APAC asset and wealth management, from US$34 billion ($54 billion) at the beginning of 2023 to US$60 billion ($96 billion) by the end of 2024.
However, there was a 17 per cent decline in asset and wealth management deals in APAC from 932 in 2023 to 773 in 2024.
The Asia-Pacific trend reflected international movements, with global deals in asset and wealth management falling 15 per cent from 2,492 in 2023 to 2,107 in 2024. Meanwhile, global deal values rose by 51 per cent, from US$131 billion at the beginning of 2023 to US$198 billion at the end of 2024.
Although 2024 experienced a decline in deal volumes, Sur projected M&A activity to rise this year in the broader financial services market alongside an increased appetite for megadeals.
“The underlying pressure on industry players to drive growth and transformation will create the impetus for higher levels of financial services M&A activity in 2025. I expect more megadeals will be announced, building on the momentum from 2024. These large deals signal growing confidence among dealmakers and raise the pressure on all market participants to move.”
M&A in the wealth management sector will continue to see consolidation this year, driven by three key trends:
- Geographic expansion to access new markets
- Cost competitiveness and operational efficiency
- Expansion of product and service offerings
On the final point, Sur explained: “Wealth managers are investing in technology to develop products and services which focus on improving client experiences and match the expectations and needs of modern investors.
“Wealth managers are also increasingly looking to illiquid and alternative products to broaden their service offerings. These may result in direct investments or involve partnering or strategic alliances to launch advanced platforms with a focus on emerging asset classes.”
For asset managers, deals will be driven primarily by companies’ attempts to grow revenue through expanding into new markets and products, particularly into alternative asset classes.
The PwC global financial services deals leader concluded: “M&A continues to be an essential strategic element in helping financial services players shape their future and adjust their business models to stay relevant and generate growth.
“We expect that dealmaking activity in the financial services industry will include acquisitions focused on both revenue and margin growth, with the intent of accessing new markets and technologies to remain competitive.”
AUTHOR
Jasmine Siljic
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