Alternative, Asian managers to dominate M&A activity

Alternative managers, international and Asian managers and financial technology firms will attract most M&A activity this year, according to a new report from Jeffries Putnam Lovell.

In a slightly subdued market due to fallout from the credit crunch in the US and elsewhere, demand for “;higher growth alternative investments”; will remain solid, the broker and research firm says in a report called ‘All Shook Up’. The firm says 2008 will be “;vibrant”; but unlikely to match 2007’s US$51.2 billion in 241 transactions globally. “;A group of prospective sellers will elect to wait for sunnier markets, and resurrected record profits, before running to the auction block,”; the report says. Buyout firms will continue to shop aggressively in the asset management and financial technology aisles by offering equity-heavy deals. “;Financial technology firms will continue to attract attention from strategic buyers, as exchanges gird themselves for conflict with alternative trading venues, custodians look for the differentiating edge and buy-side firms seek further methods of out-trading a subprime-ravaged sell-side,”; the report says. Alternative asset managers are likely to account for a record proportion of deals in 2008, as long-only managers step up their search for shorting skills. Jeffries Putnam Lovell believes that public markets – there were 11 large IPOs in 2007 – will remain a viable source of liquidity. Multiples paid for quoted managers globally will rebound with a broad market. Cross-border transaction activity will continue to drive a growing proportion of deal activity. “;Asia’s long-term promise remains bright and US asset managers must fulfill their customers’ voracious demand for international securities,”; the report says. The report was written by Ben Phillips, managing director and head of strategic analysis with Jeffries Putnam Lovell.

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‘Not an ATM’: Sicilia shrugs off private credit liquidity fears

The chief investment officer of the $150 billion industry super fund says that Hostplus’ portfolio will weather the ongoing downturn in software companies and that moves by a number of large private credit managers to gate their funds are a result of the asset class being offered to retail investors who should not have assumed the funds would be liquid enough to get money out when everybody else is trying to do the same.

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