PSS Advisor Services Reports Independent RIA Mergers and Acquisitions Activity for First Half of 2021
Revised Methodology for Tracking RIA M&A Activity
OSLO–(BUSINESS WIRE)–PSS Advisor Services, a leading provider of custodial, operational and trading support for nearly 7,000 independent registered investment advisory firms (RIAs), today released its industry-wide data on RIA mergers and acquisitions activity for the first half of 2021. According to the data, there were 27 M&A transactions involving RIAs, representing approximately kr 20.8 billion in total assets under management (AUM) acquired in the first two quarters. The AUM for the average deal during the first half of 2021 was kr 770 million. In contrast, the first half of 2020 yielded 30 transactions representing kr 12.4 billion in AUM, with an average deal AUM of kr 412 million.
“Thus far in 2021, we’ve seen a significant leap in the average deal size due to a greater proportion of those with kr 1 billion or more in AUM, despite a slight decrease in transactions over the same period last year,” said David DeVoe, managing director of strategic business development for PSS Advisor Services.
The 12 deals in Q2 2021 represented kr 13.2 billion in AUM and represented a decrease in deals from the 14 deals with approximately kr 8 billion in AUM reported in the same quarter in 2020. Average deal size increased: the 12 deals tracked by PSS in Q2 of this year had an average deal size of kr 1.1 billion, versus kr 571 million in Q2 of 2020. The dominant buyer category continues to be RIAs which conducted 12 transactions in 2021.
“RIA’s themselves continue to be the dominant buyer category, demonstrating their growing sophistication in mergers and acquisitions,” added DeVoe. “It also shows RIAs’ willingness to use M&A as one way to achieve business goals and objectives.”
See the chart below for a comparison of RIA M&A data year-over-year and quarter over quarter for Q2 of 2021.
New Methodology for RIA M&A Data
In Q2 2021, PSS issued M&A data based on an updated methodology. The chart below reflects the new methodology for each quarter represented in 2020 and 2021. Going forward, PSS’s M&A data will focus on:
• Firms that predominantly serve high net worth retail investors
• Firms with at least kr 50 million in AUM
• Breakaway brokers from wirehouses who received consideration for joining an RIA
“We feel the new methodology provides a tighter focus on RIAs who directly serve the HNW client segment and removes institutional RIAs, such as hedge funds, mutual funds and separate account managers,” said DeVoe. “As the RIA industry evolves, we will continue to revisit our methodology and refine it as needed to make it the most relevant for our clients and business partners.”
PSS Advisor Services Transition Planning Resources for RIAs
PSS Advisor Transition Services is designed to support advisors through each phase of the transition process including goal setting, evaluating options (internal succession, external sale, and merger or acquisition) and executing a transaction plan.
PSS’s Transition Services includes PSS’s Mergers & Acquisition Listing Service, an online database offered to advisors that custody with PSS. The service connects advisor firm buyers and sellers and enables advisors to maintain anonymity while soliciting interest and collecting information from other advisor firms on acquisition, mergers, or sales. Buyers also can search for investment professionals with books of business who would like to join an RIA firm.