DeVoe Issues Alert – Deal Volumes Fall In October And November, May Portend Sustained Downturn, But 2022 Still On Track To Break Record
DeVoe & Company issued an off-cycle supplemental RIA Deal Book Alert to its quarterly RIA M&A coverage titled “M&A Activity Drops in 4th Quarter,” stating that the firm’s research shows that “RIA M&A activity plummeted in October and has maintained a slow pace through mid-November.”
According to the firm, 15 transactions posted in October and November is on the same pace, a 35% decline against the average of 23 monthly transactions for the first three quarters of the year. Only one transaction per week occurred in the last three weeks of October, off 81% from the trailing 12-month average.
Firm CEO David DeVoe said, “The wheels fell off the M&A train in early October.”
Analyzing the RIA M&A landscape, DeVoe continued, “2022 delivered three quarters of unexpectedly strong activity, given the market environment. High interest rates, a declining stock market and a challenging economic environment typically drive down M&A. It remains to be seen if these pressure points are creating a short-term lumpiness of volume or a sustained downturn.”
Regardless of this activity decline, DeVoe & Company reports that 227 transactions posted through November 15, and the firm continues to forecast a record-breaking year.
“A six-week downturn cannot be ignored,” DeVoe said. “However, the pipelines of DeVoe & Company and many acquirers remain strong. The year is still expected to set a record, but it will not be a blockbuster increase over 2021’s 241 transactions.”
James Miller, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached at ContributingEd@wealthsolutionsreport.com