A recent report found that merger and acquisition activity in the registered investment advisory industry showed a modest uptick in the most recent quarter, suggesting 2023 will be a busy year for deals.
There were 75 deals in the first quarter of this year, up from 73 announced in the fourth quarter of 2022. Echelon Partners added in a new report that the modest increase in M&A activity was the first quarterly increase since the fourth quarter of 2021, but also represented a 20.2% decline from the same quarter in 2022.
Echelon expects a total of 315 deals this year. That’s eight more than in 2021, but 7.6% less than in 2022, when he had a record 341 deals.
Private equity shops continue to drive the RIA M&A space, with financial sponsors directly or indirectly involved in 77.2% of all deals in the last quarter, including the largest deals such as includes some of the Clayton, Duvilliers & Rice take focus financial private.
Echelon believes the “slight” rise in trading activity in the first quarter of this year is “particularly noteworthy given the uncertainties that have arisen in the quarter.” Silicon Valley Bankcollapse.
Echelon also expects an increase in transaction volume in the second quarter of this year and the first quarter of 2024 “given sellers who may have delayed the transaction in 2022.”
The number of M&A deals in the first quarter may not have been spectacular, but the volume was dramatic. Echelon said he involved $1.2 trillion in assets in deals in the first quarter of this year. This represents his 61% of total transaction value for the entire 2022 year. This year is poised to be his second-largest year for M&A deals, according to reports.
After a decline in average assets per deal in 2022, Echelon expects an 11.6% increase this year, largely thanks to the large deals seen in the first quarter, including: CI Financialacquisition of Avalon Advisoracquired by Captrust Monroe Voss Consulting and Cerity Partners‘ acquisition ARGI Financial Group.