May 4, 2021

Willkie partners Laura Delanoy, Elliot Gluck, Ben Haskin and Jay Spinola recently presented “Key Considerations in Asset Management M&A/Consolidation Transactions” at the Investment Company Institute’s 2021 Virtual Mutual Funds and Investment Management Conference.

The Private Equity Law Report recently published two articles on Asset Management M&A Transactions. The series is based on a recent program presented by Willkie partners Laura Delanoy, Elliot Gluck, Ben Haskin and Jay Spinola on key considerations in fund industry mergers and acquisitions and similar consolidation transactions.

In their presentation, the partners note the increase in the consolidation of asset managers in recent years, and how many asset managers are focused on entering new segments of the business, gaining greater economies of scale, as well as exiting other portions of their business. While every deal is unique, there are common themes and considerations – both transactional and regulatory –  across the consolidation landscape.

Following the structure of the Willkie attorneys’ presentation, the first PELR article, entitled “Asset Management M&A Transactions: Negotiating Deal Terms and Addressing the Assignment of Advisory Contracts,” describes the common structures of the transactions and key terms used when negotiating the deal documentation, as well as regulatory concerns and the process of obtaining client consents. Topics covered include transaction structure, risk allocation, closing conditions and earn-outs when negotiating a deal; as well as the consequences of assignment, client consents, registered fund approvals and safe harbor considerations in the assignment of advisory contracts. It can be accessed here (subscription required).

The second article, “Asset Management M&A Transactions: Role of Target and Buyer Diligence and Tips for Areas to Scrutinize,” addresses due diligence issues that may arise and how certain problems discovered during that process can affect the transaction terms. Topics covered include regulatory matters, product reviews, review of key contracts, personnel reviews and consideration of distribution arrangements in due diligence; and the importance of reverse due diligence by the target and the board of any funds. The article can be accessed here (subscription required).