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AWM deal volumes rise amid strategic repositioning
But policy uncertainty may dampen near-term activity
Dealmaking rebounded in the asset and wealth management (AWM) sector at the end of 2024, coinciding with the outcome of the November US elections and investors’ perception of a more business-friendly attitude from the incoming Congress and presidential administration. After declining to 70 and 63 deals in the second and third quarters of 2024, respectively, deal volume jumped to 80 and 85 deals in the fourth quarter of 2024 and first quarter of 2025. This was the highest level of AWM deal volume since the fourth quarter of 2022 and the first quarter of 2023. However, the Trump administration’s April 2025 tariff announcements and continued market uncertainty about federal policies on trade, federal spending and foreign policy may put at least a temporary damper on deal volume.
Despite these macroeconomic uncertainties, AWM businesses remain guardedly optimistic about the opportunities presented by recent market disruption. Deals continue to be driven by businesses’ efforts to strategically reposition themselves in order to offer new products, access new markets and enhance their ability to attract new assets under management.
Note: The source used in the 2025 midyear outlook is S&P Global Market Intelligence.
AWM sector trends include:
- Efforts to develop retail-focused alternative asset products via partnerships between large alternative managers and traditional asset managers, offering these businesses new capital sources and investor diversification.
- These attempts at developing mass-market retail products also coincide with the growth of semi-liquid vehicle launches, particularly tender offer funds, which offer exposure to both public and private market investments and are targeted at high-net-worth accredited investors.
- Businesses continue to combine and partner to diversify their product offerings, leveraging existing client relationships to attract new investor capital with a broader array of investment options.
- BlackRock, Inc. announced its acquisition of HPS Investment Partners, a leading private credit manager, in December 2024 in a continued push to expand its private market product offerings, building on its acquisition of Global Infrastructure Partners earlier in 2024.
- A sustained period of higher interest rates and macroeconomic uncertainty have led to slower exits and fundraising difficulties for private equity (PE) firms managing closed-end funds.
- Difficulty returning cash to investors has helped drive both AWM manager and investor interest in retail and semi-liquid products, as well as the PE secondaries market, with managers looking to buy or partner with other businesses to develop those products.
- Fee pressure, the drive to acquire economies of scale and the desire of aging founders to exit and transition management to the next generation continues to drive deals in the wealth management space.
Looking ahead
Retail products
The expansion of alternative investment products into the retail channel is reshaping the industry. We expect private markets to become more accessible as alternative asset managers launch retail-focused vehicles, primarily in infrastructure and credit (notably non-traded BDCs), with some exposure to PE. These products offer high-net-worth individuals access to return profiles historically limited to institutional investors through closed-end funds. In many cases, they may co-invest alongside institutional vehicles managed by the same firm, broadening access to high-quality alternative strategies.
We’re seeing a growing wave of strategic discussions between alternative and traditional asset managers, as well as banks, aimed at co-developing retail offerings and expanding retail access to private markets. This trend may signal increased partnerships and potential M&A activity as alternative managers race to scale their retail capabilities.
Further fueling this momentum is a fundamental change in retail capital raising. Unlike institutional fundraising, retail distribution requires scale, personalization and easy access, prompting alternative managers to partner with intermediaries like financial advisors, fintech platforms and traditional managers already embedded in the retail space.
General partner (GP) staking
GP staking platforms are increasingly facing the challenge of how to exit long-dated, illiquid positions as the market matures. Many of these early investments were made with the expectation of indefinite ownership or eventual monetization tied to a GP’s growth or succession. Now, with some positions reaching or surpassing a 10-year hold, platforms are exploring secondary sales, continuation vehicles and other structured exit solutions. Each path presents complexities, particularly around valuation, governance rights and long-term alignment, making the question of liquidity a growing strategic concern.
In addition, rather than relying on traditional GP staking platforms, limited partners (LPs), including sovereign wealth funds (SWFs), are increasingly pursuing direct investments in GP management companies. These direct approaches offer greater control, enhanced transparency and tailored alignment, bypassing platform fees and constraints. This trend reflects a broader move toward disintermediation in private markets, where sophisticated LPs are demanding more influence and economic participation at the GP level, further challenging the traditional platform model.
“Asset managers are becoming diversified financial services businesses, leveraging partnerships and the capital markets to scale and grow AUM.”
Greg McGahan,US Financial Services Deals Leader and AWM Deals LeaderThe bottom line
AWM businesses continue to innovate, looking for opportunities to develop new products and attract new investor capital by acquiring or partnering with other managers, banks, and insurance companies. The expansion of private market investments into the retail channel and the challenge of exiting long-held private investments and returning capital to investors will be key areas to watch as managers seek to diversify their investor base and offer products with greater liquidity.
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