We have been helping our clients to navigate the challenges of recent years in the investment managers sector.
The industry itself, however, is likely to continue to consolidate against a backdrop of low growth, pressure on fees, the rise of passive funds and increased compliance costs. There will be a smaller number of mega-managers and large niche players and an increase in the number of strategic alliances. Independent asset managers are becoming more significant.
Geopolitical issues such as Brexit present major challenges. Regulatory, risk and governance scrutiny will only increase. Regulatory capital requirements and other regulatory changes, such the Market in Financial Instruments Directive (MiFID II) in Europe are resulting in structural changes.
Banks are deleveraging, whether needing to sell or to focus on their core business. Alternative Credit Providers (ACPs) are continuing to fill the gap left by banks who are unable or unwilling to lend.
Technology offers challenges and opportunities with cyber security, use of data, Artificial Intelligence, robo advisers, blockchain and FinTech entrants to the sector.
Standalone asset managers, investment management arms of banks and insurance conglomerates and alternative asset managers, including hedge funds and ACPs - both onshore and offshore - rely on Linklaters’ understanding of the commercial, competitive and regulatory pressures being faced.
We draw on our global corporate, finance and regulatory expertise to advise investment management clients in mature and emerging markets on matters including corporate/M&A, regulatory, contentious regulatory, investment funds, employment, tax, banking, risk and TMT.
Investment Managers sector experience includes advising:
- Cerberus European Investments LLC on its acquisition of the shares and £13bn UK residential mortgage loan book of Northern Rock Asset Management PLC from UK Asset Resolution
- Cerberus European Investments LLC on its acquisition of General Electric’s £5bn French banking and consumer finance business, GE Money Bank
Julius Baer Group Limited on the €68m acquisition of Commerzbank International S.A
- investment managers/financial institutions on Brexit
- a number of asset managers on their responses to the FCA’s market study into competition in the asset management market
- Beijing Tongchuangjiuding Investment Management Company Limited on the US$1.38bn acquisition of the Hong Kong life insurance operations of Ageas SA/NV through an auction process
- KLS Diversified Asset Management, a U.S. investment group, on a landmark deal with Funding Circle, a UK P2P platform, to lend £132m to small British businesses
- KKR Credit Advisors on the establishment of its U.S. and European loan origination platform including three dedicated funds (raising approximately US$2.8bn in total)
- a major asset manager in relation to an enforcement investigation into failures to control and manage conflicts of interest in its fund management business
- KKR on the acquisition of Avoca Capital, a leading European credit investment manager