An M&A Boom for Financials

Betsy Graseck and Mike Cyprys discuss the impending consolidation in the asset and wealth management industries. Mike outlines the asset management industry's expected 8% annual growth over five years, driven by private markets and solutions, while Betsy forecasts a 5.5% CAGR for wealth management, reaching $393 trillion by 2029. They attribute the rise in M&A to growth scarcity, client consolidation, and the increasing need for scale to manage rising costs and technological demands. Mike details three types of deals: inter-vertical, inter-sector (e.g., asset management with wealth or insurance), and financial sponsor deals, noting the importance of addressing cultural and integration challenges. Betsy highlights succession issues for aging advisors, the rising cost of IT infrastructure, and the high ROE and market multiples of wealth management as key drivers for consolidation and increased M&A activity from large-cap banks.