
Hester Plumridge, The Wall Street Journal, October 29, 2010
Like a watched pot that never boils, hedge-fund consolidation has been a long time coming. But for anxious hedgies, the wait may soon be over. A tide of recent deals has seen alternative managers, including U.S.-listed GLG Partners and U.K.-listed Bluebay Asset Management, change hands for prices reminiscent of the industry's pre-Lehman heyday. Although mergers between hedge funds remain rare, banks are back in the market for acquisitions. More deals look likely.
So far this year, there has been $9.3 billion of hedge-fund and asset-management deals globally, according to Dealogic. That is below boom-time peaks, but it is more than 60% above 2009's total. The $1.7 billion Man Group acquisition of GLG and the $1.5 billion Royal Bank of Canada acquisition of Bluebay were priced at around 11-12 times earnings before interest, tax, deprecation and amortization, according to Morgan Stanley. That compares to average long-term sector transaction multiples of 9-11 times and multiples of around five times during the crisis.
Continue to full article