Fenchurch was founded in 2004 and has been involved in sale of asset management firms ever since. It advises both buyers and sellers, from traditional active managers to passive and alternative ones as well as wealth managers. Beyond straight sales it has created structures underpinned by long-term asset management contracts and revenue-sharing agreements.

“Investment management is a very dynamic, fragmented industry,” says founder and executive chairman Malik Karim. “There is lots of innovation, with new businesses being set up and other ones that have peaked and get consolidated. We are at the forefront of that.

“I would like to think that we are as creative and innovative, in terms of deal structures. A lot of our deals involve an international buyer or seller.”

Karim is particularly proud of three transactions. The sale of Insight Investment to BNY Mellon: “It’s been great to watch that business prosper”. The acquisition of 15% of Investec Asset Management from the Group: “A very cleaver transaction that aligned a whole bunch of factors between the Group and the asset management subsidiary”.

And, the Standard Life takeover of Ignis: “The Standard Life share price went up by 6% on the day.”

“We have a very privileged place in the industry,” he says. “We get to see a lot of chief executives who share their perspectives on their own businesses and appetite for M&A, on a very confidential basis.”

Fenchurch consistently does three or four asset management (including wealth management) transactions per year. It did 15 in total across asset management, insurance, banking and elsewhere. In May 2016 it did a record number of transactions – six in total including three for Axa as well as ones for firms entering the GAAM Group.

“The industry is facing a number of big issues and we are seeing more appetite for transactions,” says Karim, noting there are three major trends in play.

Firstly, the trend towards capital-light businesses, especially among insurance companies: “Our large insurance industry clients are moving away from capital-heavy businesses into capital-light ones. Standard Life is a great example – it has almost transformed itself into an asset and wealth manager. I see this trend continuing”.

Secondly, long-only managers are looking for ways to replace high-margin assets that are moving to passive funds.

Thirdly, “we have seen a number of independent fund managers having to deal with a whole bunch of issues around access to distribution or manager succession aligning themselves with a bigger player.”

He says the alternatives world is particularly interesting, with firms seeking to deal with succession, institutionalizing their business or seeking a liquidity event.

“In cases where assets have peaked it is a struggle to manage the downsizing. We have seen a lot of alternative managers convert themselves to family offices. Performance is the key thing.”

However, it is not just the smaller entities that are exposed to share price volatility, as investors in Aberdeen can attest. “Larger managers that are exposed to emerging markets have seen a lot of volatility in their earnings. A lot of managers that are exposed to just one style are trying to diversify.”

There are many examples in the industry; Ashmore is reported diversifying away from EM debt into equities and MANN Group is trying to get away from its traditional pure hedge funds model into other asset classes.

“Asset management M&A can be highly rewarding but highly risky as well – managing people, alignment, retention, clients, distributors are all a key part of the planning process.”

Karim says he does not see many transformational deals in the pipeline at the moment – he says management boards are trying to see what the future will look like before settling on a strategy. “But we certainly see a lot of bolt-on and mid-market M&A in asset management.”