T Rowe Price To Acquire Oak Hill Advisors For $4.2 Billion

Is there a better investment for an investment firm than investing in another investment firm? The answer is “No” if you go by T Rowe Price’s decision yesterday to acquire credit management firm Oak Hill Advisors — the latest example…

Jennifer
Image Credit: iStock Images, Andrey Krav.
Sign up for insightful business news.

Is there a better investment for an investment firm than investing in another investment firm?

The answer is “No” if you go by T Rowe Price’s decision yesterday to acquire credit management firm Oak Hill Advisors — the latest example of the continuing consolidation of the asset-management industry.

One To Grow On

Private capital strategies — private credit, private equity, and infrastructure coupled together — grew to $7.4 trillion by the end of 2020, and Morgan Stanley expects the space to reach $13 trillion by 2026. To keep up with the demand, T Rowe is acquiring the private credit specialist in the most expensive deal in the storied firm’s history.

With $1.6 trillion in assets under its belt, T Rowe already ranked near the top of the industry’s active managers, and the expensive acquisition of Oak Hill significantly increases its piece of the pie:

  • Oak Hill will add $53 billion in assets to T Rowe’s portfolio, spread across private, liquid, distressed, special situations, structured credit, and real asset strategies, according to the Financial Times.
  • T Rowe will fork over $3.3 billion at closing, roughly 74% cash and 26% T Rowe stock. If targets are met, it will pay an additional $900 million in cash.

COVID Proof: So far in 2021, there have been 160 asset management deals worth $25.3 billion across the globe. But that’s nothing compared to last year when there were 208 deals worth $54 billion. That’s at least one feather in 2020’s cap.

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

A Strong Dollar Could Save a Horrid M&A Environment

Retailers Struggle to Move Inventory, Slowing Shipping Industry

Disney and Dish Go To War in Contract Renewal Negotiations

Minneapolis Businessman Latest American to Vy for English Soccer Ownership

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>