Global M&A Grows to Post-Crisis Record | Chief Investment Officer

Like ripening summer tomatoes, corporate mergers are swelling, with the year’s first half setting a global post-crisis record of $1.94 trillion for 8,560 deals thus far, according to the Mergermarket research group.

Led by a monster pharma takeover, Japan’s Takeda’s $79.7 billion planned acquisition of Ireland’s Shire comes amid increased scrutiny of cross-border deals. Earlier this year, President Donald Trump squelched a major transaction in the chip field, ending the quest of Singapore’s Broadcom for Qualcomm, a US company. The prospect of a trade war was a headwind the M&A market has faced thus far this year.

As a result, Mergermarket noted, for the first half, only 38.2% of M&A value was cross-border, a 6 perentage point drop versus 2017’s first six months.

In the US, which makes up about half of world deal value, the pricetag of the mergers escalated, even as the number of tie-ups shrank. As the researchers explained it: “Various established industry giants, under fire from disruptors Amazon and Netflix, continued to demonstrate a willingness to pay high prices for the most valuable targets on the market.”

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So for 2018’s first half, the average value for disclosed deals climbed 51.4% to $736.7 million from $486.5 million in last year’s comparable period, and 24.8% from $590.2 million in 2017’s second half.

On the American M&A front, the biggest deal is insurer Cigna’s $67.9 billion bid for Express Scripts, the pharmacy benefit manager. No. 2 is the planned combination of T-Mobile and Sprint, the third- and fourth-largest US wireless carriers.

Tags: M&A, Mergermarket, mergers

It’s time again to nominate and celebrate the industry’s most innovative asset owners and managers/servicers. CIO’s ninth annual Industry Innovation Awards will take place December 13 at the New York Public Library, celebrating the most innovative and talented players of institutional investing.

Please nominate asset owners and managers/servicers for this year’s awards. Nominations will close August 4, and all finalists will be announced in early September.

This year, the CIO editorial team will consult an advisory board of former and current chief investment officers, including Raphael Arndt, CIO of Australia’s Future Fund; Jagdeep Singh Bachher, CIO, vice president of Investments, University of California; Matt Clark, CIO, South Dakota Investment Council; Scott Evans, CIO of the New York City Pension Funds; David Holmgren, CIO of Hartford HealthCare; Tom Joy, CIO, Church of England; Kim Lew, CIO, Carnegie Corporation of New York; Richard Nuzum, president of Mercer’s global wealth business (2017 Consultant of the Year); and Bob Watson, CIO of FCA US. Some categories, such as investment outsourcing, transition management, and corporate investment strategies, will be judged largely on data collected via the CIO survey system.

The lifetime achievement award, which Ashbel C. “Ash” Williams, executive director and CIO of the Florida State Board of Administration (SBA), won last year, will be presented at the dinner. An overall winner from the asset owner categories will also be chosen and awarded CIO of the Year (presented last year to Evans).

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Our Next Generation Award is chosen the evening of the awards dinner, following a panel at the CIO Influential Investors’ Forum.

This year’s asset owner categories include (2017 winners in parentheses):

Foundation (Carnegie Foundation, Kim Lew)

Endowment (Church Commissioners for England, Tom Joy)

Corporate Defined Benefit Pension Plan Below $5 Billion (Computer Sciences – CSRA Inc., Brian Reed)

Corporate Defined Benefit Pension Plan Above $5 Billion (ABB, Elisabeth Bourqui)

Public Defined Benefit Plan Below $15 Billion (South Dakota Investment Council, Matt Clark)

Public Defined Benefit Plan Between $15 Billion and $100 Billion (Hawaii Employees’ Retirement System, Vijoy Chattergy)

Public Defined Benefit Plan Above $100 Billion (NYC Retirement System, Scott Evans)

Sovereign Wealth Fund (Australian Future Fund, Raphael Arndt)

Healthcare Organization (Hartford HealthCare, David Holmgren)

Defined Contribution Plan (Fiat Chrysler FCA US, Bob Watson)

ESG (University of California Regents, Jagdeep Singh Bachher)

Next Generation (W.K. Kellogg Foundation, Carlos Rangel)
Consulting (Mercer, Rich Nuzum)

*New 2018 Category: Collaboration

Asset management categories include (2017 winners in parentheses; italics indicate altered category):

Fixed Income (Nuveen Asset Management)

Equities (including alternative equity beta) (BlackRock)

Multi-Asset (including risk-balanced strategies) (Neuberger Berman)

Private Equity (Apollo Global Management)

Hedge Funds (Citadel)

Real Assets (AEW Global)

Defined Contribution Strategies (Prudential)

Investment Outsourcing (Russell Investments)

Corporate Investment Strategies (includes the overall criteria to help corporate CIOs achieve their goals including positioning for growth, innovation in risk management, and hedging overall portfolios.)

(Legal & General Investment Management America)

Transition Management (BlackRock)

Data & Technology (FactSet)

ESG Investing (Generation Investment Management)

*New 2018 Category: Emerging Markets

*New 2018 Category: Corporate LDI Strategies

Tags: CIO, Innovation Awards