[Edaily Marketin YunJi Kim Reporter] As demand for personal wealth management—including retirement planning, estate planning, and tax optimization—rises rapidly amid an aging population, global private equity fund (PEF) managers are rushing to acquire U.S. wealth management firms one after another. Analysts attribute this trend to the belief that such acquisitions not only provide a steady stream of fee revenue tied to client assets but also secure channels for selling alternative investment products to individual clients. Competition among global PEFs to secure a foothold in asset management firms with market growth potential and stable cash flows appears to be intensifying.

According to global market research firm PitchBook on the 30th, the total value of U.S. asset management company acquisitions involving global PEFs so far this year has reached $30.3 billion (approximately 43.635 trillion won). This figure is rapidly approaching last year’s annual record of $36 billion. While the number of deals itself has not increased significantly compared to last year, the total transaction value has more than doubled year-over-year as the size of the acquisition targets has grown.

Notably, the recent bidding war for the U.S. asset management firm Wealth Enhancement Group drew significant attention from the capital markets after the Carlyle Group and Bain Capital joined the race. Wealth Enhancement Group is a U.S. asset management firm that provides investment, retirement, tax, and financial planning services to individual clients; it has expanded its operations by continuously acquiring smaller asset management firms. The transaction price for this deal is reported to be around $7 billion (approximately 10 trillion won), including debt. If the acquisition is finalized, it is expected to go down as one of the largest private equity (PEF) deals involving a U.S. asset management firm.

Private equity firms are also entering the U.S. asset management market in succession. Investcorp, a Middle Eastern alternative investment manager, recently made its debut in the U.S. market by acquiring Burger Financial Group, which manages approximately 3,800 clients and $3 billion in assets across five U.S. states. Burger Financial is a firm that provides investment, retirement, tax, and portfolio management services to individual clients in the middle class and above; its high client and advisor retention rates are cited as key factors in its investment appeal. Investcorp plans to use Burger Financial as a base to acquire additional small- and medium-sized asset management firms and grow into a major player.

The reasons private equity funds are focusing on U.S. asset management firms include: △market growth potential, △stable revenue structures, and △the ability to secure a sales base for alternative investment products. First, the U.S. independent asset management market is growing rapidly. According to market research firm Ceruller Associates, assets under management (AUM) at U.S. Registered Investment Advisors (RIAs) increased from $6.6 trillion in 2019 to $9.8 trillion as of April of this year. The average annual growth rate stands at 12%. The market is steadily expanding as more advisors have spun off from major investment banks and securities firms since the global financial crisis, and clients increasingly prefer independent advisors—who charge fees based on asset size—over financial institutions that rely on product sales commissions.

A stable revenue structure is also cited as an attractive investment feature. Since asset management firms earn fees based on the size of their clients’ financial assets, they can generate recurring revenue as long as client attrition remains low. Although the size of assets under management may fluctuate with stock market volatility, the cash flow is considered more predictable than in businesses that rely on transaction fees.

For large alternative investment managers, the fact that asset management firms serve as distribution channels connecting them to individual clients is an additional advantage. This is because it allows them to secure a foundation for supplying alternative investment products—such as private debt, infrastructure, and real estate—to individual investors. This trend aligns with the recent shift among global asset managers, which have historically grown primarily through institutional investors, toward treating retail wealth management channels as a new growth driver.

Carlyle, for example, has expanded its retail wealth management business by investing in wealth management firms CapTrust and MAI Capital. Assets under management for alternative investment products targeting retail investors have quadrupled in three years to $19 billion. Bain Capital also broadened its retail wealth management footprint by acquiring the U.S. wealth management firm Carson Group, followed by the $4.6 billion acquisition of wealth management technology firm Envestnet in 2024.

Industry observers expect competition for acquisitions of U.S. asset management firms to intensify for the foreseeable future. Regarding this, PitchBook stated, “Asset management firms are attractive investment targets with stable, fee-based business models and high retention rates for clients and advisory staff,” adding, “Since the U.S. market remains fragmented among numerous small and medium-sized players, there is significant room for growth through further acquisitions.”