Wealth management mergers and acquisitions (M&A) valuations benchmark has fallen to 2% of assets under management (AUM), and looks set to drop further over the next 2 years.
The research from wealth global consultancy, Scorpio Partnership, said the valuations benchmark is almost half of its 2010 levels.
$9.42bn spent on HNW deals since 2011
It found that over the past 21 months, M&A maintained a steady pace, with over $9.42bn being spent on deals involving high net worth (HNW) client funds.
The report said that numbers will continue downward to 1.5% in 2013 -2014. This conclusion is based on analysis carried out on 65 deals from Q1 2011 to 30 September 2011.
The consultancy said that the volume of HNW assets purchased through deals during 2011-2012 totalled $635bn, which is essentially 4% of all assets currently managed by the global wealth management industry.
Europe tops M&A deals
Continental Europe, including Switzerland, was the hottest market for M&A deals where $337.9bn of assets changed ownership.
In the UK, asset transfers through M&A hit $80.2bn, and $102.5bn changed ownership as the result of M&A in Asia.
Commenting on the results of the report, Scorpio managing partner Sebastian Dovey said: There is a strong interest among the top 50 market players in quickly boosting their emerging market books of business as they strive to increase their international business footprint.
This is now a race where M&A may make the difference. The mid-sized players recognise that to compete they need to bulk up their AUM and our expectation is the tidemark for an international wealth management business to ride comfortably through the next decade is $50-70bn in AUM, he added.