RIA M&A hits all-time high in October Surprise

October was a record-breaking month for M&A among RIAs, with 39 transactions completed – the highest monthly count recorded by DeVoe & Company.

That tally surpassed the previous record of 33 deals in January 2021 and marked a significant increase from the 21 deals in October 2023, according to the leading consultancy firm.

By November 1, the total transaction count for the year reached 232, representing a 12 percent increase from the 208 deals completed by the same time in 2023.

DeVoe & Company’s RIA Deal Book tracks transactions involving RIAs with at least $100 million in assets under management. Excluding non-traditional RIA deals, such as those involving hedge funds or mutual fund companies,

“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,” David DeVoe, founder and CEO of DeVoe & Company, said in a statement revealing the findings.

Since early 2021, quarterly transaction counts have stayed within a range of approximately 65 deals, according to Devoe. But with declining interest rates on the menu, he said PE-backed buyers seem to be starting down a path of accelerated M&A that the firm recently predicted they would.

"It seems evident that these organizations were accelerating their activity in anticipation of the long-awaited rate cuts,” DeVoe said, adding that declining borrowing costs could increase confidence among PE-backed firms.

In Devoe & Co.'s October count, 83 percent of deals were executed by private equity firms or PE-backed companies, marking a substantial departure from the historical trend of about 70 percent. 

Nearly half of October’s transactions involved consolidators – firms that grow by acquiring other companies – who play a prominent role in the RIA M&A ecosystem. Leading consolidators Beacon Pointe, Cerity Partners, and Waverly Advisors each completed three acquisitions in the month, an achievement DeVoe described as rare within the industry.

The report indicated that lower capital costs could drive consolidators and private equity buyers to increase their acquisition activity, further reshaping the RIA landscape.