M&A value drops across wealth despite rise in number of deals
Findings from the auditor's latest M&A analysis were published today (10 July) and looked at the value brought from all publicly disclosed deals between January and June.
While £1.5bn in M&A value was accrued in the first half of the year, it is down significantly on the £3.7bn value recorded for the first six months of 2022.
Foresight Group eyes more M&A as acquisitions boost assets
EY noted this comes despite the number of deals having risen significantly. There were 67 M&A deals in the last six months, up from 55 recorded in the first half of last year.
«UK financial services M&A activity recorded a ten-year high in the number of transactions in the first half of 2023, demonstrating firms' strong appetite for deal-making in the wake of the pandemic,» UK financial services strategy and transactions leader Tom Groom said.
«However, economic headwinds at the start of the year — such as rising interest rates and inflationary pressures — caused many lenders to pull back from financing large deals, and the value of M&A activity is now less than half of where it stood during the same period last year.»
M&A activity in wealth management sector set for significant rise
Groom said the findings showed M&A movement across the wealth management sector had taken a particular hit from macroeconomic pressures including a continued reduction in private equity (PE) involvement.
«However, the key drivers of M&A — being growth, innovation and synergies between businesses — remain,» he stated. «As firms develop approaches to deliver M&A in this higher rate environment, we anticipate a return to higher deal values.»
EY's findings come on the back of research from NextWealth earlier this year that found advice firm acquirers are
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