A steady flow of M&A activity in the global asset management industry is expected in second-half of 2009, according to Jefferies Putnam Lovell, the investment banking group of Jefferies & Company. This follows a four-month worldwide stock market rally and some signs of a recovery.

Themes dominant in the first-half of 2009 will continue to play an outsized role in the latter half of the year, according to Jefferies Putnam Lovell. Some of these themes included divestitures by larger financial institutions needing to shore up their capital base, pure-play asset managers seeking to add scale, fill product gaps, add talent and expand product offerings at attractive prices and private equity companies drawn to the industry's growth and profit potential and low capital requirements

The investment management industry deal volume in the first-half of 2009 was lower than in same 2008 period with 72 announced transactions compared with 109 in 2008. Without the June blockbuster BlackRock purchase of Barclays Global Investors - the largest by assets under management at $1.5 trillion and second-largest by deal value at $13.5 billion - the tally for deal value and managed assets transacted would have been lower.

With BlackRock/BGI, the total deal value was $14.1 billion in the first-half of 2009. Managed assets transacted totalled $2.3 trillion.

The comparable totals a year earlier were $7.7 billion in deal value and $588 billion in assets under management changing hands.

The median deal size was under $1 billion of assets under management transacted for the first half of 2009, marking the first time since the 1990s that the median transaction size fell below $1 billion in a six-month period.

Divestitures represented 47% of the deals announced in the first half of 2009. These included three of the five largest transactions by assets under management. Divestitures represented 26% of the deals announced in the first half of 2008.

Cross-border deals fell sharply to 18% of the total from 33% in the first-half 2008. Transactions involving alternative investment managers, down from the 2008 period represented 28% of the total compared with 37% in the first-half of 2008.

Deal volume in the second quarter of 2009 totalled 35, compared with 52 a year earlier. With BlackRock/BGI, assets transacted surged to $1.7 trillion from $227 billion. Deal value jumped to $13.7 billion from $2.3 billion.

The largest transactions by assets under management announced in the second quarter of 2009 in the global investment management industry included BlackRock's purchase of Barclays Global Investors, Aquiline Capital Partners' acquisition of Conning & Company, JPMorgan Chase's acquisition of an undisclosed remainder of majority-owned subsidiary Highbridge Capital Management and Woori Finance's purchase of Credit Suisse's 30% interest in joint venture Woori Credit Suisse Asset Management.

Jefferies Putnam Lovell, a division of Jefferies & Company, is focused on the financial institutions industry. It offers a range of corporate advisory services, including mergers and acquisitions advice and capital raising.

Jefferies is an independent, full-service global securities and investment banking company.