Look For More Merrill Lynch/BlackRock-Like Deals

The recently announced asset-swap deal involving Merrill Lynch and BlackRock, is the latest "wake-up call for the global asset management business," as more such deals may be on the horizon, according to the Putnam Lovell NBF Securities2005 M&A Review. The Boston-based firm found that while the number of global M&A deals in the asset management industry last year actually dropped from 157 to 134, the value of the transactions more than doubled from $8.2 billion to $14.5 billion, and the total assets involved in the deals jumped 50% from $729 billion to $1.1 trillion.

Says Benjamin Philips, a Putnam managing director and author of the report, 'Before, manufacturers and distributors in fund management were drifting lazily toward their respective corners of the industry. Those days are over. We anticipate that a number of vertically integrated fund management systems worldwide - proprietary funds linked with captive distribution -- may now break apart in the near future.''