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Financial Institutions M&A: Sector trends - June 2019

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June 2019

We highlight the key European M&A trends in the first half of 2019, and provide our insights into the outlook for M&A moving forward


As global fintech funding in Q1 2019 approaches US$6.3 billion, London is poised to rival San Francisco as stable to the highest number of unicorns.

Established European financial institutions have joined the fintech race, hoping to harness the promise of technology—a smooth, tailored and safe consumer experience, available everywhere and to everyone. However, innovation is expensive, absorbing valuable resources at a time of unresolved trade concerns, fragmented markets, political uncertainty and unknown Brexit impact.

Do fintechs justify such high valuation multiples? Can fintechs really deliver the seemingly endless possibilities? Would resources be better allocated elsewhere?

In this series of biannual reports, we analyse inorganic investment strategies and highlight the key M&A trends across Europe and the UK in H1 2019. Focusing on banks, fintech, and other financial services (i.e., asset/wealth management, market infrastructure, consumer finance and Specialty finance), we also provide our insights into the outlook for H2 2019 and beyond.

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European financial services
M&A trends

Consolidation continues at pace—mega-mergers on the horizon

The wait is over. Whispers of mega-deals have matured into agenda items for boards of many larger European banks.

Financial Institutions M&A: Sector trends - June 2019

Stampede of the unicorns

H1 2019 has seen European fintech M&A hit new heights. Fintechs have enjoyed funding support from established financial institutions, financial sponsors, sovereign wealth funds, data giants and family offices. The next 36 months will be pivotal in identifying fintechs which will revolutionise financial services

Financial Institutions M&A: Sector trends - June 2019

Asset/Wealth Management

Fallout from MiFID II continues to drive industry consolidation. In the last 6 months, there has been a glut of smaller deals, but a dearth of megamergers

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Rapid rise of mobile commerce, e-commerce, growing merchant/ consumer familiarity with non-bank providers and accessibility by under-banked communities are all driving demand for electronic payments. It is no surprise that M&A levels have reached stratospheric heights, and show little sign of descending


Stock exchanges/Clearing houses

Seeking multijurisdictional scale, as concerns around long-term viability of the independent stock exchange operational model continue to grow

round vault door

Brokers/Trading service providers

Market consolidation continues. MiFID II, sluggish capital markets, increasing operational overheads and over-brokered European financial centres drives M&A

stock market display

Credit cards/Consumer finance

Financial sponsors provide dry powder to new entrants seeking to disrupt existing card providers, 'level-up' in-store consumer finance solutions/experience and fill the void left by payday lenders

Financial Institutions M&A: Sector trends - June 2019

Specialty Finance/Marketplace lending

Trade consolidators dominate the M&A charts, seeking scale, vertical integration and opportunities to conquer their own niches

bank vault door

Asset/Wealth management

Financial institutions M&A sector trends: asset/wealth management — H1 2019 and outlook for H2 2019

5 min read

Current market

  • Consistent, high activity levels

We are seeing

  • Industry consolidation—mostly smaller deals. Some medium-sized deals. No megamergers in H1 2019
  • Diverse investor universe:
    • Domestic/Regional trade consolidators
    • Foreign/Non-European trade buyers
    • Financial sponsors (e.g., Epiris, Ardian, KKR, etc.)
    • Insurers
    • Broker-dealers
  • Investment in fintech (mainly operational efficiency solutions)

Key drivers

  • Industry-wide profitability pressure from:
    • Stringent fee transparency requirements imposed by MiFID II
    • Low-cost passive investment options
    • Fintechs/New market entrants (e.g., Nutmeg)
    • Increasing operational costs (e.g., compliance monitoring, cyber-defence, IT malfunctions, etc.)
    • Heightened regulatory enforcement actions (primarily for competition law breaches and noncompliance with MiFID II fee transparency rules)
  • Cross-border deals to tap:
    • New markets/customer bases/distribution opportunities
    • New customer demographics in existing markets
  • Some banks (e.g., Morgan Stanley) and insurers (e.g., AXA) seeking stable returns, while others exit non-core business lines (e.g., UniCredit)

Trends to watch

  • Market polarisation—industry divided into global players and boutique/niche private banks/wealth managers (i.e., few medium-sized managers)
  • Financial viability of robo-advisors coming under close scrutiny (e.g., UBS's closure of SmartWealth, Investec's closure of Click and Invest, etc.)

Our M&A forecast

High level of consolidation to continue as managers rely on M&A to remain competitive in the MiFID II climate. Whilst a digital strategy is a 'must-have' for market participants, robo-advisory is unlikely to be the magic bullet in the short term.



Other financial services—Publicly reported deals & situations


Market consolidation

Mergers among asset managers are set to continue at 'heightened' levels in 2019, as the industry battles headwinds on a number of fronts*

1 in 3 asset managers could disappear over the next 5 years. MiFID II has resulted in mounting fee pressures, and rising costs spur more closures and consolidation**


  • Brewin Dolphin (Ireland): Acquisition of Investec's Irish wealth management business (May 2019)
  • Sanlam UK (UK): Acquisitions of Thesis Asset Management and Astute Wealth Management (January–April 2019)
  • BNP Paribas Asset Management: Privatisation of Obam (January 2019)


  • Hargreaves Lansdown (UK): Acquisition of J.P. Morgan Asset Management retail managed fund clients AuM of £765 million (April 2019)
  • Mattioli Woods (Northern Ireland): Acquisition of SSAS Solutions (March 2019)
  • JTC (Luxembourg): Acquisition of Exequtive Partners (March 2019)
  • Alvarium Investments (France): Acquisition of Iskander (March 2019)
  • Canaccord Genuity Wealth Management (UK): Acquisition of Thomas Miller UK Wealth Management and Isle of Man private client investment management operations (March 2019)
  • Dolfin Financial (UK): Acquisition of assets of Falcon Private Wealth (February 2019)
  • Prudential Financial (UK): Acquisition of Wadhwani Asset Management (February 2019)
  • Storebrand Asset Management (Norway): Acquisition of Cubera Private Equity (February 2019)
  • Banque Cramer & Cie SA (Switzerland): Acquisition of AM&C Finance (January 2019)
  • youmex (Germany): Acquisition of 87.7% of LUNIS Vermoegensmanagement (January 2019)
  • Güven Varlık Yönetim & Gelecek Varlik Yönetim (Turkey): Merger (January 2019)


Differing FI prerogatives


  • Deutsche Bank: Disposal of Portuguese private and commercial client business (June 2019)
  • UniCredit Bank: Disposal of minority stake in SwanCap Partners (February 2019)


  • ABANCA: Acquisition of Deutsche Bank's Portuguese private and commercial client business (June 2019)
  • Morgan Stanley: Acquisition of 5.5% of Tikehau (May 2019)
  • AXA: Acquisition of Capzanine (February 2019)


Cooperation arrangements

  • Gresham House: Public equity JV with Aberdeen Standard (March 2019)
  • Standard Life Aberdeen: Savings and investment products Cooperation JV with CYBG (January 2019)


High buyer appetite

Financial sponsors:

  • Epiris: Acquisition of IFG Group (March 2019)
  • Ardian: Acquisition of minority stake in SwanCap Partners (February 2019)
  • KKR: Acquisition of minority stake in Söderberg & Partners (February 2019)


  • Invesco: Acquisition of City Life (February 2019)


New markets

Expanding into new geographic locations:

  • Schroders Wealth Management (Singapore): Acquisition of Thirdrock Group (February 2019)

Expanding coverage:

  • Hauck & Aufhäuser: Acquisition of Crossroads Capital Management (June 2019)
  • Invesco: Launch of new London Stock Exchange–listed ETF targeting DLT-based companies (March 2019)


Surge of passive investment strategies

Société Générale, Citigroup, J.P. Morgan, Goldman Sachs, HSBC and BNP Paribas have all hired staff and invested in new facilities to respond to institutional clients' appetite for ETFs***

  • J.P. Morgan: Close to zero fees for new US stock ETF (March 2019)


Technological embrace

Established players buy into the fintech promise:

  • BlackRock: Acquisition of eFront (March 2019)
  • Amundi: Acquisition of Anatec (January 2019)

Growing competition from fintechs/new entrants:

  • JHC Systems: Launch of Digital Wealth Platform (April 2019)

Turbo-charge for WealthTech:

  • Nutmeg: Successful £45 million Series E funding round led by Goldman Sachs and Convoy (January 2019)
  • Raisin: Successful US$114 million Series D funding round, led by Index Ventures, Ribbit Capital and Thrive Capital (February 2019)

Not all that glitters is gold:

  • Investec: Discontinuance of Click and Invest robo-advisor (May 2019)


Shifting regulatory/ political landscape

  • Financial Reporting Council (UK): New proposed stewardship code covering sustainable investments that benefit clients, society and the environment (January 2019)
  • FCA (UK): Pressure from SCM Direct on UK FCA to take action against non-MiFID II-compliant asset managers (January 2019)


Increasing operational risk

UK FCA investigates 48 investment companies over concern of non-compliance with fee transparency under MiFID II****

  • Hargreave Hale (UK): £306,300 fine for breach of UK competition law (February 2019)
  • River and Mercantile Asset Management (UK): £108,600 fine for breach of UK competition law (February 2019)





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