Long a hotspot within financial services, European asset management deals are booming, with a strong pipeline of M&A expected in 2H25.

“The trend to consolidation of wealth management and private banking will continue,” Thomas Krecek, partner and co-head of Clifford Chance’s corporate practice for Europe, said.

“Another theme to watch involves asset managers buying other asset managers to upscale critical mass,” he added.

Dealmaking has boomed in the year to date (YTD), according to Mergermarket data. Some 190 transactions have been announced so far this year, with disclosed volumes of EUR 9.6bn.

This is the third-best YTD result by deal volumes in the past decade. The high-water marks came in YTD24, with 196 deals worth EUR 14.4bn, and YTD21, with 206 transactions worth EUR 10.7bn.

The start to the year is so strong that in the unlikely event that no further deals were announced in the months ahead, 2025 would already rank fifth in the past decade’s full-year (FY) results, behind FY24, FY21, FY19 and FY17.

The largest YTD deal is a proposed joint venture (JV) between Generali and Natixis parent BPCE to create Europe’s largest asset manager by revenues, announced in January. The merged entity will have EUR 1.9trn in assets under management (AUM). The deal is expected to close in early 2026.

The underlying market dynamics driving the need for consolidation are based on a somewhat incongruous combination: the market has never been bigger, but profit margins tend to be soft.

“Margins are under pressure, so there is a need for efficiencies and economies of scale,” Krecek said.

A report from McKinsey, published on 9 July, said that AUM in Europe hit a record EUR 28tn in 2024, 2% above the previous peak in 2021. However, profits in 2024 were 20% below the levels seen in 2021.

Danish compromise

The drive to consolidate asset management is part of a wider deal-driven concentration movement within European financial services. Although hostile bank deals have dominated headlines, the underlying dynamics have a longer pedigree.

“Although it might look like a new paradigm, the tectonic plates have been shifting consistently for more than a decade,” Krecek said. “We have been seeing whole divisions changing hands without a hostile element. We also see friendly, strategic deals to consolidate or deconsolidate assets.”

Private equity (PE) firms also have a role to play, and not just in building fintechs that might eventually merge with financial institutions.

“We have also been seeing sponsor-led rollups to create platforms that can become bank divisions,” Krecek says, adding that this is “technically very challenging.”

The so-called Danish compromise, which was introduced during the Danish Presidency of the European Union (EU) Council in 2012 and came into effect in January 2025, has been a factor in driving the bancassurance model, which is based on banks offering insurance products to their clients.

The compromise allows banks to add the value of insurance holdings to their risk-weighted assets, instead of deducting them from Common Equity Tier 1 capital. However, the European Central Bank (ECB) decided not to apply the compromise to the insurance divisions of banks buying asset managers.

“The decision not to apply the Danish compromise to asset management purchased via insurance entities means that the conditions for such deals are not as favourable,” according to Amélie Champsaur, a Paris-based partner at Cleary Gottlieb. However, she added that there is a drive to consolidate asset management nonetheless.

Cyrus is consolidator

The pipeline of deals to watch includes C WorldWide Asset Management of Denmark, owned by Altor and with around EUR 20bn AUM. The vendor has reportedly chosen Moelis to prepare a sale.

Elsewhere in the Nordics, Finlandia Group of Finland is working with Carner Corporate Finance to explore its strategic options, as reported by Mergermarket in May. It has AUM of EUR 1bn.

Meanwhile, on the buyside, French wealth management advisory firm Cyrus in June secured unitranche financing from Ardian to support its growth strategy. The firm, which has EUR 19bn AUM, has executed a series of transformative acquisitions and wants to “seize consolidation opportunities”, co-CEOs Meyer Azogui and Patrick Ganansia said in a joint statement at the time of the financing.

Finally, market dynamics are changing in Germany, Switzerland and Austria (DACH), which means the region could become a significant source of activity, according to Mergermarket analysis from February.

The ECB might not be keen on banks leading the consolidation, but dealmakers can still expect plenty of activity in 2H25.