BRIC focused asset managers are seen as attractive takeover targets
Deloitte, a leading business advisory firm, believes that developing and emerging markets represent a growing business opportunity for asset managers, especially if they focus on BRIC economies. Deloitte is in fact estimating that, starting from January 2011, the value of M&A deals in emerging markets have totaled GB £1bn; with their worth believed to increase by another GB £1bn before the end of 2013.
Baber Din (Director of Investment Management M&A at Deloitte) stated that, with the GDP in BRICs worth about US $13trn and forecasted to grow exponentially to a total of US $95trn by 2050, these jurisdictions represent an excellent market opportunity for asset managers and funds focusing on such areas are seen as attractive way to enter fast growing markets. Mr. Din believes that with both North American and European asset management sectors becoming increasingly more competitive, emerging market such as BRIC economies will continue to attract larger, more stable investment managers, who are willing to expose themselves to developing markets.
However, in spite of the attractive statistics, emerging markets also present challenges and difficulties, due to restrictions on foreign investments and ownership, and sometimes complex legislations. Additionally, local distribution models and taxation regimes may contribute negatively to the already difficult process of identifying suitable targets and/or partners, thus an accurate study and understanding of all these factors is necessary to transform attractive opportunities into successful mergers and partnerships.