Investments Acquisitions Disposals

The European Financial Services sector is increasingly characterised by a low interest rate environment, a low growth rate and an increasingly limited return on assets due to regulatory standards. Furthermore, the level of liquidity has probably never been so high given, in particular, the ECB’s accommodating monetary policy over the past ten years.

For firms within the sector, this means that expected organic growth is becoming more limited, pressures on their cost structure is increasing and the profitability of certain asset segments is no longer attractive enough. It is therefore not surprising to find a dynamic M&A market, focused on gaining growth points and market share, strengthening competitiveness and reducing costs by attaining critical size and conducting asset portfolio rotations with a view to optimisation.

In our experience, most external growth transactions fail to create value. Five major issues must be resolved before the deal itself:

Ares & Co therefore often gets involved during the early stages of the deal:

Examples of assignments: