Mergers and acquisitions (M&A), strategic partnerships and joint ventures are in the pipeline for asset and wealth managers, suggesting more consolidation ahead, according to the findings of a PricewaterhouseCoopers (PwC) survey of industry chief executive officers (CEOs).
Some 48% of respondents plan to boost their companies’ capabilities through joint ventures or strategic alliances this year, while 43% have plans for M&A, PwC says in a recent report on the survey of 126 asset and wealth management CEOs globally. Respondents could tick multiple answers to a question.
The report, published in March, did not say when the survey was conducted, and did not provide the geographical breakdown of the respondents.
"CEOs report varying motivations for M&A, including economies of scale and synergies, entering new markets, and the need to offer a more diverse range of products," Olwyn Alexander, global asset and wealth management leader at PwC Ireland, says in the report.
There have been several major asset management M&A in recent years, including last year’s 3.55 billion-euro (US$4.37 billion) merger between French asset manager Amundi and Italy's Pioneer Investments, and the £11 billion (US$15.4 billion) union between UK's Standard Life and Aberdeen Asset Management.
The PwC survey also found that CEOs are worried that senior executives are unskilled in digital technology. Some two-thirds of CEOs say they are "somewhat or extremely concerned" about the lack of digital skills in senior leadership and throughout their businesses.
But in spite of the concern, it’s “hard to escape the conclusion that not all are feeling and acting with sufficient urgency”, according to Ms. Alexander. “Should there be more energy around cutting costs for example? Or on hiring digital talent? Yet 33% of CEOs said that they expected their headcount to stay the same over the next 12 months,” she says.