Analyst Note
| Greggory Warren, CFA |For much of the past five years, we've believed that industry consolidation was inevitable for the traditional U.S.-based asset managers as they faced a new world order where organic growth and fees would be pressured, participants were expected to spend more on their investment operations and distribution capabilities, and profit margins were pressured. As we move forward, we expect to see a combination of capability-based transactions (aimed at filling product holes or diversifying a firm's operations by asset class/product, distribution channel or geography), transformative-scale acquisitions (which would be a hybrid of capability-based and pure-consolidation transaction) and deals that are purely aimed at the consolidation of existing fund infrastructure.