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For sale: Asset managers
A $6bn (£4.7bn) merger between UK-listed Henderson (HGG) and Janus Capital (JNS:NYSE) could spur further consolidation in the asset management sector.
Shares in Henderson rallied as much as 17% to 272p on news of the deal (3 Oct), which will see Henderson shareholders own 57% of an enlarged Janus-Henderson group with $320 billion of assets under management (AuM).
Investors also snapped up shares in Henderson’s mid cap rivals Aberdeen Asset Management (ADN) and Jupiter (JUP) following the deal, partly because of the potential for further consolidation in the sector.
Aberdeen was rumoured to be in talks with an unnamed potential buyer in late 2015, according to a Financial Times report, though chief executive Martin Gilbert subsequently denied the claim.
Jupiter as well as Henderson were reported to be in the sights of US retail bank Wells Fargo (WFC:NYSE) in November 2015, according to the Sunday Times .
Key risks for UK-headquartered asset managers are uncertainties around the UK’s vote to leave the EU, which places a question mark over London’s access to EU financial markets.
Asset managers like Aberdeen and Jupiter have struggled for some time with tough overseas investment markets and consolidation could be one solution to improving profitability.