After a three-year plateau in mergers and acquisitions, the RIA industry set a new record for deal activity in 2024, driven in part by a late-stage burst of transactions.
That's according to the latest report from DeVoe & Company, which found that by the end of the year, dealmakers had notched a record 272 transactions, surpassing the previous high of 264 deals posted in 2022.
A surge in fourth-quarter dealmaking propelled the industry past expectations, as 81 transactions were completed in the final three months of the year. That included an October surprise of 39 deals, making it the most active month on record.
"A blockbuster fourth quarter pushed 2024 to a new highwater mark," said David DeVoe, founder and CEO of DeVoe & Company. "This momentum is likely to continue through the new year, and the industry may well be back on track for a steady increase in M&A going forward."
DeVoe's Q4 2024 Deal Book highlighted several factors that contributed to the increased activity. On the buyer side, interest rate cuts that began in September 2024 made financing acquisitions more attractive, particularly for firms reliant on debt. On the seller side, post-election market gains supported valuation expectations, encouraging firm owners to consider deals.
Ongoing structural changes in the wealth industry also played a role. Many RIA owners are approaching retirement without clear succession plans, contributing to an ongoing wave of transactions. Meanwhile, client demand for comprehensive wealth management services remains strong, further fueling consolidation.
The report also noted a power shift among the types of buyers leading the market. While acquisitive RIAs had been increasing their share of transactions in recent years, consolidators regained dominance in late 2024, accounting for 57 percent of deals in the last three months. Still, their share of transactions for the full year was 44 percent, a three-percentage-point downtick from 2023.
The deal dynamics in 2024 also appeared to favor larger firms, which were more active in selling than smaller RIAs. The average seller's assets under management, excluding mega-RIAs with more than $5 billion, reached $929 million – approaching levels seen before rising interest rates slowed deal activity in previous years.
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