Investors cautiously optimistic about mergers and acquisitions in asset and wealth management sector
Dealmakers in the asset and wealth management sector are cautiously optimistic about mergers and acquisitions (M&A) activity, according to the professional services firm PwC. Global M&A trends in financial services are showing a positive outlook for the coming year, with a substantial increase in deal values in the Asia-Pacific region. PwC’s report predicts a rise of over 70 per cent in deal values in Asia-Pacific in 2024, indicating a promising trend for the M&A landscape.
The return of megadeals and an increase in deal values are contributing to the overall optimism among dealmakers in the financial services sector. Megadeals, defined as deals exceeding US$5 billion in value, have been a significant driver of the positive outlook for M&A in the industry. Christopher Sur, PwC’s global financial services deals leader, emphasized the momentum created in 2024, with an uptick in megadeals and growth in deal values despite relatively low deal volumes.
In the Asia-Pacific region, specifically in asset and wealth management, deal values saw a significant surge of 76 per cent from US$34 billion at the beginning of 2023 to US$60 billion by the end of 2024. However, there was a 17 per cent decline in the number of deals, dropping from 932 in 2023 to 773 in 2024. This trend in Asia-Pacific reflected a broader international pattern, with global deals in asset and wealth management declining by 15 per cent from 2,492 in 2023 to 2,107 in 2024. Despite the drop in deal volumes, global deal values rose by 51 per cent, from US$131 billion to US$198 billion during the same period.
Looking ahead to 2025, Sur projected an increase in overall M&A activity, driven by the industry’s need for growth and transformation. He anticipates a higher appetite for megadeals and expects to see more of these large-scale transactions in the financial services sector. The pressure on industry players to adapt to changing market dynamics and drive growth is likely to fuel increased M&A activity in the coming year.
The cautious optimism among dealmakers is grounded in the recent trends and data that indicate a positive trajectory for asset and wealth management M&A. With the return of megadeals, rising deal values, and an overall positive outlook for the financial services sector, 2025 is shaping up to be a year of opportunities and growth in the M&A landscape. Businesses in the asset and wealth management space are closely monitoring these developments and preparing for potential opportunities that may arise as the year progresses.
