The registered investment advisor community saw a major boost in mergers and acquisitions activity last month, with 39 transactions, the highest monthly volume on record, according to an analysis by DeVoe & Company.
October’s volume surpasses the previous high of 33 deals recorded in January 2021, and was nearly double the volume in the year-ago period, which saw 21 deals.
“Although one shouldn’t read too much into a single month of data, the surge in October’s RIA M&A activity is a conspicuous spike following nearly three years of unremarkable activity,” DeVoe CEO and founder David DeVoe said in a statement. “DeVoe & Company recently predicted that declining interest rates would likely drive up PE-backed buyer activity; it seems evident that these organizations were accelerating their activity in anticipation of the long-awaited rate cuts.”
Year-to-date through Nov. 1, deals are up 12% from the same period in 2023, with 232 transactions. That compares to 208 deals for the same period last year.
Private equity or private equity-backed firms accounted for 83% of the deals in October. These firms have historically accounted for approximately 70% of RIA acquisitions.
DeVoe points to Beacon Pointe, Cerity Partners and Waverly Advisors, each of which did three deals during the month.
DeVoe’s third quarter Deal Book said that as the cost of capital comes down and debt service ratios improve, the most active players in the RIA M&A space will invest more aggressively. Specifically, the most well-capitalized consolidators—those backed by private equity firms—will become more active in the space over the next 12 to 18 months. These consolidators have dedicated M&A teams working to build scale, enhance resources and expand geographically.
