Determinants of Serial Acquisition Performance in the Asset Management Industry

Abstract

The focus of this research is to gain insight into the fluctuation of acquisition activity amongst asset management firms leading to industry consolidation. Firms are acquiring more competitors in a shorter span of time which exhibits the characteristics of serial acquirers. Some firms experience more long-term success with this strategy than others. While previous literature exists on acquisition programs and post-acquisition performance, none delve into the nuances of asset management that could improve post-acquisition performance in the industry. Based on extensive analysis of literature and industry expertise, I introduce an empirically founded framework of determinants for serial acquisition performance in the industry. At the foundation, this study examines determinants from a similar industry, banking, and presents determinants specific to asset management, i.e., the development of financial advisors and the incorporation of ETFs into product offerings. Focusing on human capital and product diversity resulted in an improvement of post-acquisition financial performance. Asset management firms may consider including these components into acquisition programs in the future.