Investment Services Industry Insights

Transcription

June 2015
Investment Services
Industry Insights
A Review of M&A Activity and Public Market Valuation
in the Asset Management and Broker-Dealer Sectors
William Blair
Table of Contents
Introduction ...................................................................................................................................................................................................................................................... 1
Asset Management Sector........................................................................................................................................................................................................................... 2
M&A Trends in Asset Management ................................................................................................................................................................................................... 2
Recent Select Asset Management M&A Transactions .............................................................................................................................................................. 4
Recent Notable Transactions ............................................................................................................................................................................................................... 5
Public Valuation Update .............................................................................................................................................................................................................................. 6
Relative Performance .............................................................................................................................................................................................................................. 8
Long-Term Valuation Observations.................................................................................................................................................................................................. 9
Indexed Stock Price Performance ................................................................................................................................................................................................... 10
Broker-Dealer Sector ................................................................................................................................................................................................................................. 11
M&A Trends Among Broker-dealers ............................................................................................................................................................................................. 11
Recent Select Broker-Dealer M&A Transactions ..................................................................................................................................................................... 13
Recent Notable Transactions ............................................................................................................................................................................................................ 14
Public Valuation Update ...................................................................................................................................................................................................................... 15
Public Valuation Update ........................................................................................................................................................................................................................... 17
Relative Performance ........................................................................................................................................................................................................................... 17
Long-Term Valuation Observations............................................................................................................................................................................................... 18
Indexed Stock Price Performance ................................................................................................................................................................................................... 19
Other Information ....................................................................................................................................................................................................................................... 20
Equity Offerings ....................................................................................................................................................................................................................................... 20
Debt Offerings........................................................................................................................................................................................................................................... 21
Financial Services & Technology Analysts and Coverage ........................................................................................................................................................ 22
Investment Banking Team Biographies ............................................................................................................................................................................................ 23
Select William Blair Transactions ........................................................................................................................................................................................................ 24
Notes .................................................................................................................................................................................................................................................................. 25
Disclosures ...................................................................................................................................................................................................................................................... 26
Table of Contents
William Blair
Introduction
Welcome to William Blair’s Investment Services Industry Insights. This report covers trends in M&A activity, transaction multiples,
and public company valuations for both the asset management and broker-dealer sectors. We believe that the two sectors have
significant overlap and that long-term trends favor consolidation between the two sectors. We hope you enjoy this report and we
welcome any feedback.
Market Overview
Asset Management Sector
Asset management firms generate high margins and recurring cash flows. In addition, these companies have meaningful operating
leverage. As a result, M&A transactions in the sector are generally completed at attractive multiples. Since 2000, approximately 43%
of all deals were completed at more than 3.00 times LTM revenue, and approximately 48% of M&A transactions in the sector were
completed at greater than 10.0 times LTM EBITDA. Acquirers in the sector are most often strategic parties that are able to pay more
because of the significant revenue synergies generated by pushing new or stronger investment products through an established
distribution platform.
For the year-to-date period through May 31, 2015, we have identified a total of 57 transactions in the asset management sector, up
approximately 8% from 2014. However, the aggregate disclosed dollar volume of these transactions totals $951 million, down from
$1.9 billion in the comparable period last year. During this period, the aggregate assets under management (AUM) of the 37 acquired
companies with disclosed AUM were approximately $127 billion, down meaningfully from 2014.
Public company valuations have continued to increase from the fourth quarter 2008 low of 5.9 times LTM EBITDA and remain near
the long-term average of 10.8 times from 2006 through May 31, 2015. The median LTM enterprise-value-to-EBITDA multiple for
asset managers as of May 31, 2015, was 9.9 times, down from 10.1 times in fourth quarter 2014 but well above the third quarter
2011 low of 7.0 times. Recent market momentum has helped drive stock price performance for the asset management sector over the
last 12 months compared with the broader market. The index of asset management companies tracked by William Blair increased
13.9% over the last 12 months, above the S&P 500, which was up 9.6% over the same period.
Broker-Dealer Sector
For the year-to-date period through May 31, 2015, we have identified 27 transactions in the broker-dealer sector, up approximately
4% from 2014. In addition, the broker-dealer sector experienced a decreased aggregate disclosed dollar volume of $845 million in
2015, down meaningfully from 2014. Since 2000, approximately 25% of all deals were completed at more than 3.00 times LTM
revenue, and approximately 85% of M&A transactions in the sector were completed at greater than 10.0 times LTM net income.
Public company valuations in the broker-dealer sector decreased in the most recent period. Price-to-LTM EPS as of May 31, 2015,
was 18.2 times, down from 19.6 times at the end of 2014 but above the 17.2 times long-term median. The price-to-forward EPS
multiple as of May 31, 2015, was 15.2 times, down from 17.3 times at the end of 2014 but higher than the long-term median of 14.2
times. The broker-dealer indices we follow have generally outperformed the broader market over the long term. Over the last 12
months, the S&P 500 rose 9.6%, while the four broker-dealer segments showed an average return of 17.1%, ranging from a 7.6%
gain by boutique broker-dealers to a 27.0% gain by online broker-dealers.
Summary of M&A Activity
M&A activity in both the asset management and broker-dealer industries remains relatively healthy, and we expect this trend to
continue through the rest of the year, driven by an accelerating U.S. economy and healthy market environment. We anticipate M&A
activity in these sectors will be driven by acquirers seeking to 1) broaden their investment platforms by strengthening or adding
expertise in various asset classes or distribution channels, 2) expand their geographic reach by establishing on-the-ground expertise
in foreign locations or buying (versus building) established relationships in core geographic regions, and 3) enhance or expand the
services they offer to clients. We believe that these favorable dynamics position the industry for growth and that M&A activity will
remain strong in the near future.
Robert Metzger
+1 312 364 8517
[email protected]
J.P. Young
+1 312 364 8160
[email protected]
Matthew Zimmer
+44 207 868 4502
[email protected]
Introduction 1
Asset
Management
Sector
William Blair
Asset Management Sector
M&A Trends in Asset Management

Year-to-date aggregate M&A transaction volume is running slightly ahead the comparable period in 2014, though disclosed
dollar volume is meaningfully lower over the same period.

Year‐to‐date aggregate AUM of $127 billion is below year-to-date 2014 levels and below average AUM levels.
Historical Transaction Volume
Average: 105
150
125
97
100
94
84
98
112
111
107
115
109
7.5%
124
123
103
88
75
53
57
2014
YTD
2015
YTD
50
25
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Historical Transaction Dollar Volume
Average: $9,635
($ in millions)
$30,000
$23,996
$25,000
$17,518
$20,000
$15,000
$10,000
$5,000
(49.7%)
$7,238
$8,127
$5,184
$15,439
$9,117
$7,073
$3,768
$3,523
$7,486
$13,246
$3,542
$1,893
$951
2014
YTD
2015
YTD
$0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Historical Aggregate AUM
Average: $701
($ in billions)
$3,000
$2,442
$2,500
$2,000
$1,340
$1,500
$1,000
$500
(60.0%)
$786
$366
$307
$294
2002
2003
$695
2004
2005
$558
$819
$298
$156
$0
$600
$455
2006
2007
2008
Note: Year-to-date as of May 31, 2015.
Sources: SNL Financial and William Blair’s Merger and Acquisitions market analysis.
2 Asset Management Sector
2009
2010
2011
2012
2013
2014
$318
$127
2014
YTD
2015
YTD
William Blair

As shown below, approximately 43% of aggregate deals since 2000 have been completed at above 3.00 times LTM revenue and
48% have been completed at greater than 10.0 times LTM EBITDA.

Size matters: transactions less than $50 million were completed at 1.59 times LTM revenue and 8.4 times LTM EBITDA,
substantially less than the valuations on larger deals.
LTM Revenue Multiple Breakdown
LTM EBITDA Multiple Breakdown
8.0%
27.1%
42.9%
Greater than 3.00x
Greater than 10.0x
48.0%
1.50x to 3.00x
Less than 1.50x
5.0x to 10.0x
Less than 5.0x
44.0%
30.0%
LTM Revenue Multiple by Transaction Size
5.50x
5.00x
4.50x
4.00x
3.50x
3.00x
2.50x
2.00x
1.50x
1.00x
0.50x
0.00x
LTM EBITDA Multiple by Transaction Size
4.89x
15.0x
12.0x
12.0x
9.0x
2.81x
8.4x
9.2x
6.0x
1.59x
3.0x
0.0x
<$50mm
$50mm - $500mm
>$500mm
<$50mm
$50mm - $500mm
>$500mm
Asset Management Sector 3
William Blair
Recent Select Asset Management M&A Transactions
Recent Select Asset Management M&A Transactions
($ in millions)
Transaction Value/
Announced
Date
Target Name
Acquirer
05/27/15
Minsheng Wealth Management
Minsheng Holdings
05/08/15
Quest Investimentos
Azimut Holding
05/04/15
MCG Capital
HC2 Holdings
04/30/15
MARFIN Diversified Strategy Fund
04/29/15
04/07/15
Transaction LTM
Value
Revenue
$57.5
2.00x
LTM
EBITDA
AUM
NA
NA
24.0
NA
NA
NA
196.5
4.20
6.1x
NA
Dorchester Capital
59.5
NA
NA
NA
Ozark Trust & Investment Corporation
Simmons First National Corporation
20.0
3.52
NA
1.88%
Red Rocks Capital
DST Systems
65.0
NA
NA
4.92%
03/30/15
Jamison, Eaton & Wood
Silvercrest Asset Management Group
13.9
NA
NA
1.20%
03/19/15
SEB Asset Management
Savills
21.5
0.50
NA
0.22%
02/11/15
Samson Capital Advisors
Fiera Capital Corporation
45.5
NA
NA
0.51%
01/27/15
Valad Europe
Cromwell Property Group
145.0
NA
6.4
3.08%
01/15/15
Woodway Financial Advisors
Westwood Holdings Group
47.0
4.52
9.0
2.94%
01/05/15
Dorsey, Wright & Associates
NASDAQ OMX Group
225.0
NA
NA
NA
12/17/14
Silvermine Capital Management
Man Group
11/12/14
Conning Holdings Corp.
Cathay Financial Holding Co.
11/07/14
AXA China Region Insurance Co. /Hong Kong Pension Business
Principal Financial Group
10/17/14
Quilter Cheviot
09/17/14
ZAIS Group
09/03/14
Standard Life Investments / Standard Life Financials
Manulife Financial Corporation
08/13/14
Corpus Sireo
08/07/14
08/04/14
70.0
NA
NA
1.84%
240.0
2.40
NA
0.32%
2,597.1
NA
NA
NA
Old Mutual
585.0
4.70
15.0
3.61%
HF2 Financial Management
175.0
NA
NA
NA
4,000.0
5.28
NA
NA
Swiss Life Holding Limited
210.0
1.30
8.8
1.31%
Banca Intermobiliare
Investor group
289.0
NA
NA
7.75%
Northern Lights Capital Group
Treasury Group
193.0
NA
NA
NA
07/16/14
Banyan Partners
Boston Private Financial Holdings
80.0
1.60
NA
2.15%
07/14/14
BSI
Banco BTG Pactual
1,500.0
2.10
NA
1.68%
07/01/14
Placemark Holdings
Envestnet
66.0
NA
NA
0.47%
06/30/14
Geneva Capital Management
Henderson Group
200.0
NA
NA
3.17%
06/19/14
Numeric Holdings
Man Group
494.0
5.50
10.5
3.36%
05/05/14
Reliance Financial Corporation
Fidelity National Information Services
Mean
Median
Note: Transaction values and multiples calculated in local currencies.
Sources: SNL Financial, Capital IQ, and FactSet Research Systems.
4 Asset Management Sector
110.0
NA
NA
NA
$434.4
3.37x
9.3x
2.51%
145.0
3.52
8.9
2.02%
William Blair
Recent Notable Transactions
Description:
Samson Capital Advisors LLC is an employee owned investment manager, primarily investing in
broadly diversified issuers, including municipals, treasuries, agencies, corporate, and mortgagebacked securities. The firm provides its services to high net worth individuals, investment
companies, pooled investment vehicles, charitable organizations, and corporations. Fiera Capital
Corporation is an independent asset management firm primarily investing in growth and value
stocks of small-cap companies. It also makes investments in income trusts and preferred shares.
The firm primarily provides its services to institutional investors, mutual funds, charitable
organizations, and private clients.
Target:
New York, NY
Observations/Rationale:
Buyer:
Montreal, Canada
Key Metrics:
Announced Date:
Transaction Value ($M):
Majority/Minority:
TV/LTM Revenue:
TV/LTM EBITDA:
TV/AUM %:

The acquisition will bring Fiera Capital's total assets under management to over CAD$96
billion while bolstering its U.S. presence in the global asset management space.

Following the acquisition, Benjamin Thompson, current Chief Executive Officer of Samson,
will assume the role of President and Chief Executive Officer of Fiera Capital's U.S. asset
management subsidiary. This entity will bring the combined U.S. presence of Samson and
existing Fiera Capital U.S. affiliates to $17.2 billion in assets under management.

Jean-Guy Desjardins, chairman and CEO of Fiera Capital, stated, “With this acquisition, we are
creating a full-fledged global asset manager in the U.S, adding strong leadership and
investment talent in order to further expand our presence in this dynamic and sophisticated
market.”
02/11/15
$45.5
Majority
NA
NA
0.51%
Description:
Wealth Enhancement Group is an independent wealth management firm. Its services include
financial planning, investment management, tax strategies, risk management, estate planning, and
workplace education. The company also provides insurance, mortgage, securities, and investment
advisory services. Lightyear Capital LLC is a private equity firm specializing in middle market,
growth capital, recapitalizations, and leveraged buyout investments. The firm focuses on
companies in the financial services including asset management, banking, brokerage, financial
technology, insurance, specialty finance, leasing, and related business services.
Target:
Plymouth, MN
Buyer:
LIGHTYEAR CAPITAL
New York, NY
Key Metrics:
Announced Date:
Majority/Minority:
TV/LTM Revenue:
TV/LTM EBITDA:
TV/AUM %:
04/21/15
NA
Majority
NA
NA
NA

The transaction was attractive to Lightyear because of Wealth Enhancement Groups
investment advisory capabilities, strength in the wealth management business, and
penetration into new markets.

Following the acquisition, the employee-owners of Wealth Enhancement Group will continue
to hold a stake in the company.

Donald Marron, Chairman and Founder of Lightyear Capital, stated, “Wealth Enhancement
Group has an outstanding track record of growth and success in the wealth management
business. The firm works with its clients to provide family office-quality financial planning
and advice. We think this is a compelling business proposition that can be extended into
markets across the country.”
Asset Management Sector 5
William Blair
Public Valuation Update
Public Asset Managers
($ in millions)
Company
Affiliated Managers Group Inc.
Prides Crossing, MA
BlackRock, Inc.
New York, NY
Market Cap Net Debt
$12,239.6 $1,292.9
Enterprise
Value
Net Debt
(Cash) /
EBITDA
AUM% of
Enterprise
Value
$15,262.7
1.3x
Enterprise Value(1)/
Price/Earnings
LTM
Revenue
LTM
EBITDA
2015E
EBITDA
2.4%
5.98x
15.5x
14.6x
16.3x
14.3x
15.0%
2015E
2016P
LT EPS %
61,116.2
3,527.0
64,924.2
0.7
1.4%
5.83
13.2
13.0
18.0
15.8
13.4%
251.5
(432.7)
98.3
(8.6)
0.4%
0.40
1.5
1.8
28.3
20.8
10.0%
1,703.1
(108.3)
1,595.6
(0.8)
2.9%
4.91
11.9
10.6
18.1
13.3
21.2%
647.1
(31.5)
615.6
(0.6)
3.8%
5.56
11.2
11.2
NA
NA
NA
Eaton Vance Corp.
Boston, MA
4,788.3
311.4
5,236.3
0.7
1.7%
3.63
9.3
9.6
16.4
16.3
11.4%
Federated Investors, Inc.
Pittsburgh, PA
3,654.0
(43.8)
3,619.1
(0.2)
1.0%
4.17
14.1
12.7
21.0
16.1
3.0%
Fortress Investment Group LLC
New York, NY
1,633.0
(70.2)
2,146.5
(0.2)
3.1%
1.36
15.9
11.8
10.0
8.1
52.0%
31,518.4 (7,104.0)
25,076.8
(2.2)
2.8%
3.00
7.9
7.3
13.5
13.6
6.0%
Calamos Asset Management Inc.
Naperville, IL
Cohen & Steers Inc.
New York, NY
Diamond Hill Investment Group Inc.
Columbus, OH
Franklin Resources Inc.
San Mateo, CA
GAMCO Investors, Inc.
Rye, NY
1,728.5
(375.9)
1,362.1
(2.4)
2.9%
3.10
10.5
7.7
15.8
14.1
15.0%
17,155.0
5,295.0
23,413.4
3.6
2.9%
4.53
16.5
14.0
15.0
12.8
13.0%
Janus Capital Group, Inc.
Denver, CO
3,399.3
(238.5)
3,191.1
(0.7)
1.7%
3.24
9.8
8.8
17.9
14.2
22.7%
Legg Mason Inc.
Baltimore, MD
5,915.1
(110.6)
5,850.0
(0.2)
0.8%
2.08
10.7
9.5
17.8
14.1
15.6%
Och-Ziff Capital Management Group LLC
New York, NY
2,209.5
6,209.5
11,053.6
6.5
22.9%
6.95
11.0
12.1
8.5
7.5
19.9%
Pzena Investment Management, Inc.
New York, NY
114.8
(51.5)
121.1
(0.9)
0.4%
1.05
2.6
1.9
15.0
11.1
18.0%
Silvercrest Asset Management Group Inc.
New York, NY
101.4
(14.5)
98.4
(0.8)
0.5%
1.40
5.8
4.4
15.1
13.8
16.0%
T. Rowe Price Group, Inc.
Baltimore, MD
21,026.6 (1,895.4)
19,131.2
(0.9)
2.5%
4.72
9.5
8.7
16.6
15.1
11.9%
The Blackstone Group L.P.
New York, NY
26,603.5
7,981.3
41,864.4
NA
13.5%
5.03
NA
8.8
10.8
11.3
10.1%
Virtus Investment Partners, Inc.
Hartford, CT
1,108.7
(211.8)
931.7
(1.6)
1.7%
2.09
7.1
7.2
13.1
12.4
3.8%
Waddell & Reed Financial, Inc.
Overland Park, KS
4,026.8
(666.2)
3,360.5
(1.3)
2.7%
2.11
7.1
7.2
14.2
13.3
12.4%
486.8
(83.6)
403.1
(1.9)
1.9%
3.45
9.6
9.3
NA
NA
NA
$9,591.8
$627.6
$10,921.7
(0.5x)
3.5%
3.55x
10.0x
9.2x
15.9x
13.6x
14.5%
3,399.3
(70.2)
3,360.5
(0.8)
2.4%
3.45
10.1
9.5
15.8
13.8
13.2%
Invesco Ltd.
Atlanta, GA
Westwood Holdings Group Inc.
Dallas, TX
Mean
Median
(1)
Enterprise Value = Market Capitalization + Preferred Equity + Total Debt + Minority Interest - Cash and Equivalents. Assumes cash and equivalents for these
companies represent excess cash.
Sources: Capital IQ, FactSet Research Systems, and company filings as of May 31, 2015.
6 Public Valuation Update
William Blair
Public Asset Managers Key Metrics
Assets Under Management ($B)
Company
Revenues ($M)
Q1 2015
Affiliated Managers Group Inc.
Prides Crossing, MA
Q1 2014
Q1 2015
$556.8
$632.2
13.5%
$593.1
$635.0
7.1%
$1.40
$2.28
62.9%
BlackRock, Inc.
New York, NY
4,400.9
4,774.2
8.5%
2,670.0
2,723.0
2.0%
4.40
4.84
10.0%
Calamos Asset Management Inc.
Naperville, IL
26.1
24.5
(6.4%)
63.9
57.4
(10.2%)
0.11
0.01
(94.9%)
Cohen & Steers Inc.
New York, NY
49.0
54.7
11.5%
72.8
83.8
15.1%
0.43
0.45
4.7%
Diamond Hill Investment Group Inc.
Columbus, OH
13.0
16.1
24.0%
23.2
29.3
26.4%
1.78
2.89
62.4%
Eaton Vance Corp.
Boston, MA
278.6
295.7
6.1%
354.1
354.9
0.2%
0.59
0.24
(59.3%)
Federated Investors, Inc.
Pittsburgh, PA
366.2
355.8
(2.9%)
211.5
220.5
4.3%
0.34
0.35
3.1%
62.5
69.9
11.8%
183.5
168.9
(8.0%)
0.01
0.15
NMF
Franklin Resources Inc.
San Mateo, CA
886.9
880.6
(0.7%)
2,095.9
2,009.8
(4.1%)
0.89
0.98
9.6%
GAMCO Investors, Inc.
Rye, NY
47.6
46.5
(2.1%)
104.5
103.8
(0.6%)
1.09
0.97
(11.0%)
Invesco Ltd.
Atlanta, GA
787.3
798.3
1.4%
1,269.5
1,291.6
1.7%
0.43
0.60
41.1%
Janus Capital Group, Inc.
Denver, CO
174.1
192.4
10.5%
230.2
262.7
14.1%
0.16
0.23
43.8%
Legg Mason Inc.
Baltimore, MD
701.8
709.1
1.0%
681.4
702.3
3.1%
0.58
0.73
NMF
Och-Ziff Capital Management Group
LLC
New York, NY
42.6
48.3
13.3%
285.5
332.9
16.6%
0.14
0.14
0.9%
Pzena Investment Management, Inc.
New York, NY
25.4
27.9
9.8%
26.4
28.7
8.5%
0.11
0.12
4.5%
Inc.
New York, NY
16.2
18.2
12.3%
16.7
17.4
4.2%
0.13
0.18
43.4%
T. Rowe Price Group, Inc.
Baltimore, MD
711.4
772.7
8.6%
954.6
1,027.0
7.6%
1.12
1.13
0.9%
The Blackstone Group L.P.
New York, NY
271.7
310.5
14.2%
1,502.0
2,462.2
63.9%
0.44
1.00
127.3%
58.0
54.8
(5.6%)
107.9
103.8
(3.7%)
2.34
2.11
(9.8%)
Waddell & Reed Financial, Inc.
Overland Park, KS
131.4
122.9
(6.5%)
390.4
385.5
(1.3%)
0.88
0.80
(8.8%)
Westwood Holdings Group Inc.
Dallas, TX
19.1
21.7
13.8%
25.9
29.6
14.1%
0.72
0.71
(1.4%)
$458.4
$487.0
6.5%
$564.9
$620.5
7.7%
$0.86
$1.00
12.1%
131.4
122.9
8.6%
230.2
262.7
4.2%
0.58
0.71
4.5%
Fortress Investment Group LLC
New York, NY
Virtus Investment Partners, Inc.
Hartford, CT
Mean
Median
%
Q1 2014
Diluted EPS
Q1 2014
Q1 2015
%
%
Public Valuation Update 7
William Blair
Relative Performance

Revenue growth has averaged 13.5% over the prior three years, slightly ahead the comparable average last year.

Average forward revenue growth is estimated to be 4.9%.

Margins are generally in a tight band, averaging 35.9% for LTM EBITDA and 18.8% for LTM net income.
Three-Year Revenue Growth
45%
35%
25%
15%
5%
(5%)
(15%)
41%
37%
Average: 13.5%
34%
26%
20%
19%
16%
15%
13%
13%
12%
10%
10%
8%
7%
5%
5%
2%
2%
(1%)
BX
OZM
FIG
VRTS DHIL WHG SAMG AMG TROW WDR
PZN
GBL
CNS
IVZ
BLK
EV
BEN
LM
JNS
FII
(11%)
CLMS
Forward Revenue Growth
Average: 4.9%
30%
15%
(0%)
(15%)
(30%)
(45%)
17%
15%
12%
11%
11%
10%
10%
9%
8%
7%
5%
4%
2%
1%
0%
(0%)
(1%) (2%) (2%)
(5%) (10%)
DHIL
JNS
PZN
BX
CNS
WHG
FII
SAMG TROW AMG
BLK
LM
FIG
OZM
EV
GBL
IVZ
WDR
BEN CLMS VRTS
LTM EBITDA Margin
75%
60%
Average: 35.9%
53%
50%
50%
47%
43%
41%
39%
38%
37%
37%
36%
32%
31%
30%
29%
28%
26%
20%
20%
20%
25%
(NMF)
(0%)
OZM
PZN TROW DHIL
BLK
CNS
AMG
BEN
EV
WHG
GBL
JNS
WDR VRTS
FII
IVZ
SAMG CLMS
LM
FIG
BX
LTM Net Income Margin
40%
30%
32%
Average: 18.8%
30%
30%
29%
24%
24%
23%
23%
21%
21%
20%
20%
19%
18%
17%
17%
10%
9%
8%
8%
OZM
LM
FIG
7%
7%
5%
(0%)
DHIL TROW BLK
BEN
GBL
CNS
BX
WHG VRTS
IVZ
Sources: FactSet Research Systems, Capital IQ, and SNL Financial as of May 31, 2015.
AMG
WDR
EV
FII
JNS
SAMG PZN
CLMS
=
William Blair
Long-Term Valuation Observations

Current valuation levels have increased significantly from third quarter 2011, though they are still slightly below the longerterm median of 10.8 times.

Valuation levels remain in line with long-term historical levels.
Enterprise Value/LTM EBITDA
Median: 10.8x
20.0x
15.0x
14.6x
14.8x
13.0x
11.8x
12.9x
13.6x
13.0x
13.5x
10.8x
12.6x
11.8x
11.3x
11.4x
11.1x
10.1x
10.0x
9.1x
5.9x
12.6x
10.2x
10.4x
12.1x
10.1x
10.8x 11.0x
9.4x 9.4x
9.9x
10.2x
11.3x
10.6x
10.0x
9.9x
6.9x
7.0x
8.2x
8.8x 8.8x
5.0x
0.0x
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006
2007
2008
2009
2010
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2011
2012
2013
2014
2015
Enterprise Value/Forward EBITDA
15.0x
10.0x
Median: 9.9x
13.8x
12.9x
12.1x
12.3x
12.0x 11.6x
11.7x
10.8x
10.3x
10.6x
9.8x
9.9x
10.1x
10.2x
8.9x
9.1x
8.6x
8.8x
8.6x 8.4x
7.2x
5.3x
6.4x
7.1x
8.1x
6.9x
7.9x 8.1x
11.6x 11.6x
11.0x
10.1x
10.1x
10.0x
9.5x 9.5x
8.8x
5.0x
0.0x
Q1 Q2 Q3 Q4
2006
Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sources: Capital IQ and company filings as of May 31, 2015.
William Blair
Indexed Stock Price Performance

Over the last five years, publicly traded asset management companies have outperformed the S&P 500 and S&P 500 Financial
Sector Index.

The public universe of asset managers experienced a moderate drop in valuations in late 2011 but has since rebounded.

Over the last 12 months, the index of asset management companies tracked by William Blair has increased 13.9%,
outperforming the S&P 500 and the S&P Financial Sector Index.
Five-Year Stock Price Performance
Asset Managers (+131.3%)
S&P 500 (+93.4%)
S&P 500 - Financials (+67.4%)
250
+131.3%
200
+93.4%
+67.4%
150
100
50
0
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
LTM Indexed Stock Price Performance
Asset Managers (+13.9%)
S&P 500 (+9.6%)
S&P 500 - Financials (+10.3%)
130
120
+13.9%
+10.3%
+9.6%
110
100
90
80
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Sources: FactSet Research Systems and company filings as of May 31, 2015.
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Broker-Dealer
Sector
William Blair
Broker-Dealer Sector
M&A Trends Among Broker-dealers

The year-to-date number of transactions is up approximately 4% from the year-ago period.

Year-to-date aggregate disclosed transaction value of $845 million is significantly below year-to-date 2014 levels, but above the
$804 million disclosed in 2013.
Historical Transaction Volume
100
80
Average: 73
106
120
73
60
71
46
89
78
3.8%
100
87
73
63
77
46
44
40
26
27
2014
YTD
2015
YTD
20
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Historical Transaction Dollar Volume
Average: $15,069
($ in millions)
(44.0%)
$62,487
$70,000
$60,000
$50,000
$40,000
$28,999
$30,000
$3,134
$4,368
$2,896
2002
2003
2004
2005
$17,498
$15,730
$13,433
$20,000
$10,000
$0
$33,246
2006
2007
2008
Note: Year-to-date as of May 31, 2015
11 Broker-Dealer Sector
2009
$4,011
$6,190
2010
2011
$804
2012
2013
$3,095
$1,510
$845
2014
2014
YTD
2015
YTD
William Blair

As shown below, approximately 25% of the aggregate deals since 2000 have been completed at above 3.00 times LTM revenue,
and approximately 85% have been completed at greater than 10.0 times LTM net income.

Size matters: transactions less than $50 million were completed at 0.74 times LTM revenue and 9.0 times LTM net income,
substantially less than the valuations on larger deals.
LTM Revenue Multiple Breakdown
LTM Net Income Multiple Breakdown
5.6%
9.4%
25.4%
53.8%
Less than 1.50x
Greater than 10.0x
1.50x to 3.00x
5.0x to 10.0x
Greater than 3.00x
Less than 5.0x
20.8%
85.0%
LTM Revenue Multiple by Transaction Size
LTM Net Income Multiple by Transaction Size
5.00x
25.0x
4.00x
20.0x
3.00x
2.38x
2.00x
1.00x
0.74x
15.0x
15.0x
10.0x
1.55x
21.7x
9.0x
5.0x
0.0x
0.00x
<$50mm
$50mm - $500mm
>$500mm
<$50mm
$50mm - $500mm
>$500mm
Broker-Dealer Sector 12
William Blair
Recent Select Broker-Dealer M&A Transactions
Retail Broker-dealers
Deal Value/
($ in millions)
Equity Value
LTM Net
Income
Date Effective
Target
Acquirer
LTM Revenue
05/19/15
Expander Advisors
Aviva
NA
NA
NA
05/19/15
Leonardo & Co.
BPCE
NA
NA
NA
04/28/15
JHS Capital Advisors
Ameriprise Financial
NA
NA
NA
03/23/15
First Midwest Securities
American International Group
NA
NA
NA
03/11/15
Kyte Group Limited
R.J. O'Brien & Associates
$7.1
NA
NA
02/23/15
Sterne Agee Group
Stifel Financial Corp.
150.0
NA
NA
01/20/15
Capital Guardian Holding
Northern Star Capital Holdings
NA
NA
NA
12/18/14
Kades-Margolis Corporation
U.S. Retirement Partners
NA
NA
NA
11/24/14
Merchant Capital
NA
NA
NA
11/19/14
A. R. Schmeidler & Co.
Artemis Investment Management Corporation
15.5
NA
NA
10/31/14
City Index Holdings
GAIN Capital Holdings
117.5
0.97x
11.0x
10/01/14
Dominick & Dominick
Coil Investment Group
09/22/14
Securities Service Network
Ladenburg Thalmann Financial Services
08/13/14
Girard Securities
08/06/14
NA
NA
NA
45.0
0.39
NA
RCS Capital Corporation
NA
NA
NA
VSR Group
NA
NA
NA
07/07/14
Octo CTVM
Caixa Geral de Depositos
NA
NA
NA
05/27/14
OM Securities
General Atlantic Service Company
NA
NA
NA
05/20/14
Validus/Strategic Capital Partners
174.1
NA
NA
05/20/14
Southern Trust Securities
AR Growth Finance Corporation
NA
NA
NA
04/01/14
SWS Group
Hilltop Holdings
260.5
1.05
NMF
03/12/14
Global Asset Advisors
NA
NA
NA
03/12/14
Top Third Ag Marketing
NA
NA
NA
01/17/14
J.P. Turner & Company
27.0
0.42
NA
01/16/14
Cetera Financial Group
1,150.0
0.88
NA
$224.6
0.74x
11.0x
81.3
0.88
11.0
Mean
Median
Institutional Broker-dealers
($ in millions)
Transaction Value/
Date Effective
Target
Acquirer
05/27/15
05/22/15
05/20/15
05/13/15
04/10/15
04/09/15
04/08/15
04/01/15
03/25/15
03/18/15
03/11/15
03/05/15
02/18/15
01/30/15
12/18/14
12/16/14
12/15/14
12/08/14
11/12/14
10/20/14
10/15/14
10/13/14
10/09/14
10/06/14
Mean
Median
Kuna & Co.
Dimension
Essex National Securities
NW Capital Markets/ NW Financial Group
Bay Mutual Financial
Futures activities business of Jefferies’ Bache
Blackstone Advisory Partners Asia
Faros Trading
FXCM Japan Securities Co.
Summer Street Research Partners
Kyte Group Limited
Ensco 1085
Marketplace Holdings
Kunlun Financial Group
Midtown Partners & Co.
Ashton Stewart Capital
R P Martin Group (certain assets)
Banco Espírito Santo de Investimento
G.X. Clarke & Company
Close Brothers Seydler Bank
Newport Group, Inc./ Newport Group Securities
VS Holdings
National Stock Exchange
Cutwater Holdings
Evercore Partners
Banque Cantonale de Genève
Infinex Financial Group
Stern Brothers & Co.
Knight Global
Societe Generale
Comprador Limited
Jefferies Group
Rakuten
Northland Capital Holdings
R.J. O'Brien & Associates
Management group
CenterGate Capital
CITIC Securities Company
India Globalization Capital
Aldwych Capital Partners
BGC Partners
Haitong Securities Company
INTL FCStone
Oddo & Cie
Verisight
Janus Capital Group
OpenMatch Holdings
Bank of New York Mellon Corporation
Note: Transaction values and multiples calculated in local currencies.
Sources: SNL Financial, Capital IQ, and FactSet Research Systems.
Equity Value
NA
NA
NA
NA
NA
NA
NA
NA
$7.4
NA
7.1
8.6
NA
167.6
NA
NA
NA
379.0
29.0
46.0
NA
66.0
NA
NA
$95.6
46.0
LTM Revenue
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
0.98x
NA
NA
0.98x
0.98
LTM Net
Income
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
9.0x
NA
NA
NA
NA
9.0x
9.0
William Blair
Recent Notable Transactions
Description:
Birmingham, AL
Sterne Agee Group, Inc. provides retail and institutional brokerage services, investment banking
and underwriting services, secondary trading of securities, and market making in over-thecounter stocks. The company also provides financial services, including stocks, bonds, fixed
income securities, and mutual funds, as well as asset management services including fixed income
management, alternative investment strategies, and trust company products and services. Stifel
Financial Corp. provides retail and institutional wealth management, and investment banking
services primarily in the United States. Founded in 1890 and headquartered in St. Louis,
Missouri, the company serves individual investors, corporations, municipalities, and institutions.
St. Louis, MO
Target:
Buyer:
Key Metrics:
Announced Date:
Majority/Minority:
TV/LTM Revenue:
TV/LTM Net Income:

02/23/15
$150.0
Majority
NA
NA


Sterne Agee bolsters Stifel’s Global Wealth Management segment with the addition of
approximately 730 financial advisors and independent representatives nationwide managing
over $20 billion in client assets.
The transaction closed in the second quarter of 2015 and is expected to be materially
accretive to shareholders.
Ronald J. Kruszewski, chairman and CEO of Stifel, commented, "We have identified a great
firm in Sterne Agee to bolster our Global Wealth Management group with the addition of
more than 700 financial advisors and independent representatives increasing advisor
professionals by 35%. This acquisition furthers our goal of creating a balanced, welldiversified business mix with wealth management and institutional exposure.”
Description:
Charlotte, NC
Capital Guardian Holding, LLC provides investment brokerage services to clients in the eastern
United States. It offers wealth management services, such as advisory, research, advanced
planning, trust, and asset management services; and risk management, alternative investment
advisory, and succession planning services, as well as lending and insurance solutions. Northern
Star is a family investment office focused on hedge funds, private equity, and liquid alternative
investments. Headquartered in New York, with branch offices in Europe and Miami, its investors
include several prominent European, North, and South American families and institutions.
New York, NY
Target:
Buyer:
Key Metrics:
Announced Date:
Majority/Minority:
TV/LTM Revenue:
TV/LTM Net Income:
01/20/15
NA
Majority
NA
NA

With the acquisition of Capital Guardian, Northern Star Capital’s AUM in commingled funds
and managed accounts will exceed $3 billion.

Post transaction, Richard Moran will be appointed as the new president and chief operating
officer of Capital Guardian.

Mr. Moran stated, "I am pleased to join our partners at Northern Star to lead the growth and
expansion efforts of Capital Guardian… Rarely do you see such a unique opportunity and
extraordinary value proposition: To be a leading financial services firm offering both
company advisors and independent advisors full service wealth management capabilities
including RIA, Asset Management, International, Family Office, Trust and Insurance Services.
These capabilities have historically been the exclusive domain of the large global banks."
William Blair
Public Broker-dealers
($ in millions)
Price/Earnings
Price/Revenue
Stock Price
Market
Capitalization
$31.65
$41,572.9
32.1x
30.4x
21.0x
6.71x
5.98x
5.11x
23.2%
131.1%
29.46
8,540.9
25.9
25.4
19.9
4.68
4.45
4.12
18.5%
137.3%
FXCM Inc.
New York, NY
1.44
73.0
16.3
16.3
27.2
1.71
1.46
1.36
21.9%
107.1%
GAIN Capital Holdings Inc.
Bedminster, NJ
9.30
456.2
11.9
10.6
7.9
1.15
1.00
1.04
16.0%
74.3%
IG Group Holdings PLC
London, United Kingdom
11.93
4,366.5
21.6
20.7
19.2
7.40
6.80
6.39
4.0%
500.1%
Interactive Brokers Group Inc.
Greenwich, CT
35.70
2,087.7
38.2
23.4
24.5
13.15
10.99
9.56
10.0%
499.3%
BGC Partners Inc.
New York, NY
$9.45
$1,997.3
14.1x
12.7x
10.7x
1.09x
0.85x
0.81x
16.8%
75.3%
Compagnie Financiere
Tradition
Lausanne, Switzerland
68.90
463.2
NA
NA
NA
NA
NA
NA
NA
NA
GFI Group Inc.
New York, NY
5.85
999.3
NMF
NMF
28.7
1.33
0.88
0.77
NA
NA
ICAP PLC
8.44
5,484.7
34.8
20.4
16.2
2.81
2.76
2.67
3.9%
488.5%
INTL FCStone Inc.
New York, NY
35.07
665.7
17.9
25.6
13.6
1.19
1.02
0.98
19.0%
96.7%
Investment Technology Group
Inc.
New York, NY
26.86
919.4
17.5
15.5
12.6
1.62
1.56
1.52
12.5%
103.3%
Knight Capital Group Inc.
Jersey City, NJ
13.49
1,591.0
22.7
18.5
12.7
1.24
1.26
1.23
10.0%
185.0%
MarketAxess Holdings Inc.
New York, NY
88.45
3,301.1
40.8
36.1
31.4
11.91
10.53
8.89
17.8%
203.2%
6.03
1,469.3
11.9
11.5
8.6
1.30
1.20
1.17
6.6%
174.3%
Company
LTM
2015E
2016P
LTM
2015E
2016P
LTP EPS
Growth %
PEG
Online Broker-dealers
Charles Schwab Corp.
San Francisco, CA
E*TRADE Financial Corp.
New York, NY
Inter-Dealer Brokers
Tullett Prebon PLC
William Blair
Public Broker-dealers (cont’d)
($ in millions)
Company
Stock Price
Market
Capitalization
Price/Earnings
LTM
Price/Revenue
2015E
2016P
LTM
2015E
2016P
LTP EPS
Growth %
PEG
Midsize Broker-Dealer
Evercore Partners Inc.
New York, NY
$50.97
$1,856.7
18.0x
16.1x
13.6x
2.07x
1.75x
1.61x
9.8%
163.9%
Greenhill & Co.
New York, NY
38.94
1,140.4
24.0
20.5
16.7
3.84
3.28
3.03
17.5%
117.3%
LPL Investment Holdings Inc.
Boston, MA
42.64
4,097.9
17.1
16.7
13.6
0.93
0.89
0.84
15.0%
111.2%
Piper Jaffray Cos.
Minneapolis, MN
47.42
757.5
11.9
13.4
12.3
1.18
1.20
1.13
10.0%
118.7%
Raymond James Financial Inc.
St. Petersburg, FL
58.12
8,360.2
16.7
17.2
15.7
1.64
1.51
1.40
12.7%
129.5%
St Louis, MO
53.26
3,615.4
18.4
17.2
14.1
1.56
1.39
1.25
12.2%
141.2%
$16.50
$173,284.6
21.6x
12.3x
10.3x
2.04x
1.98x
1.86x
8.5%
144.3%
4.12
68,998.3
13.7
11.6
9.5
1.76
1.75
1.70
31.9%
36.5%
Citigroup Inc.
New York, NY
54.08
164,086.3
15.3
9.9
9.1
2.13
2.10
2.02
22.8%
43.4%
Credit Suisse Group AG
Zurich, Switzerland
26.41
43,263.3
14.2
12.5
10.3
1.59
1.62
1.57
21.4%
58.5%
Deutsche Bank AG
Frankfurt am Main, Germany
30.06
41,456.0
16.9
13.4
8.7
1.15
1.11
1.11
48.9%
27.4%
206.19
89,077.4
11.5
10.9
10.5
2.54
2.49
2.47
8.0%
135.7%
JPMorgan Chase & Co.
New York, NY
65.78
244,115.3
11.9
11.3
10.1
2.55
2.43
2.31
6.3%
179.2%
Morgan Stanley
New York, NY
38.20
75,255.0
15.0
12.7
11.4
2.14
2.02
1.93
14.6%
87.4%
UBS AG
Zurich, Switzerland
21.36
82,120.0
16.7
14.4
12.2
2.67
2.51
2.41
15.3%
94.3%
$37.87
$35,849.1
19.6x
17.0x
14.9x
3.00x
2.72x
2.49x
15.5%
155.9%
30.85
3,856.6
17.0
15.8
12.7
1.76
1.75
1.61
14.8%
124.1%
Global Investment Banks
Bank of America Corp.
Charlotte, NC
Barclays PLC
Goldman Sachs Group Inc.
New York, NY
Mean
Median
William Blair
Relative Performance

Revenue growth has averaged 3.9% over the prior three years, slightly ahead of the comparable average last year.

One-year forward revenue growth varies widely, averaging 6.0%.

LTM net income margins vary widely, averaging 9.6%.
Three-Year Revenue Growth
25%
Average: 3.9%
29% 25%
15% 15% 15% 14%
15%
10% 9% 8% 8%
5%
4% 4% 3% 3% 3% 3% 2%
2% 2% 1% 1% (0%)
(5%)
(6%)
(1%) (4%)
(8%)
(5%)
(8%)
(10%)
(17%)
(15%)
(25%)
Forward Revenue Growth
45%
35%
25%
15%
5%
(5%)
(15%)
(25%)
(35%)
(45%)
45%
Average: 6.0%
31%
25% 23%
21%
13% 13% 12% 12%
7% 7% 7% 6% 5% 4% 4% 3% 3%
2% 1% 1% 0% (0%) (0%)
(5%)
(1%)
(3%)
(9%)
(9%)
(40%)
LTM Net Income Margin
45% 36%
20%
Average: 9.6%
30%
26% 24% 23%
21%
17% 15%
13% 12% 12% 10% 10%
10% 10% 9% 9% 8% 8% 8% 4% 4% 3% 3% 1% 1% 0%
(5%)
(30%)
Sources: FactSet Research Systems, Capital IQ, and SNL Financial as of May 31, 2015.
(2%)
(16%)
(24%)
William Blair
Long-Term Valuation Observations

Valuations declined during the first quarter of 2015 to 18.2 times LTM EPS, down from 19.6 times in fourth quarter 2014.

Forward EPS multiples decreased meaningfully to 15.2 times, compared with 17.3 times in fourth quarter 2014.
Price/LTM EPS
Median: 17.2x
30.0x
25.0x
20.0x
16.9x
15.0x
18.1x 16.2x
15.0x
14.2x
13.7x
19.7x
18.1x
18.6x
18.2x
17.3x
18.4x 15.3x
17.7x
14.8x
15.9x
17.2x
15.7x
12.7x
12.5x
11.4x
9.9x
12.4x
10.0x
23.1x
19.6x
18.2x
20.3x
18.4x
18.8x
18.2x
19.6x
17.8x
17.1x
20.3x
16.5x
15.2x
13.7x
5.0x
0.0x
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Price/Forward EPS
25.0x
20.0x
15.0x
Median: 14.2x
15.7x
14.3x
15.3x
14.0x
14.4x
14.0x 12.1x
18.1x
17.6x
11.7x
11.4x
10.0x
14.3x
11.2x
11.2x
9.7x
16.8x
17.3x
16.5x
15.1x
14.5x
14.5x
13.3x 14.4x
12.7x
16.4x
16.1x
15.2x
13.6x
12.2x
14.5x
14.1x
14.2x
12.5x
12.1x
12.9x 11.4x
11.3x
5.0x
0.0x
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sources: Capital IQ and company filings as of May 31, 2015.
William Blair
Indexed Stock Price Performance

Over the last five years, all indices of publicly traded broker-dealers tracked by William Blair have experienced positive
performance, ranging from a 52.8% increase by boutique broker-dealers to a 114.3% increase by online brokers-dealers.

Over the last 12 months, more than half of these broker-dealer indices have outperformed the S&P 500.
Five-Year Stock Price Performance
250
S&P 500 (+93.4%)
S&P 500 - Financial (+67.4%)
Online (+114.3%)
Inter-Dealer Broker (+104.9%)
Boutique (+52.8%)
Global I-Banks (+98.3%)
+114.3%
200
+104.9%
+98.3%
+93.4%
+67.4%
+52.8%
150
100
50
0
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
LTM Indexed Stock Price Performance
S&P 500 (+9.6%)
S&P 500 - Financial (+10.3%)
Online (+27.0%)
Inter-Dealer Broker (+21.3%)
Boutique (+7.6%)
Global I-Banks (+12.6%)
130
+27.0%
+21.3%
+12.6%
+10.3%
+9.6%
+7.6%
110
90
70
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Sources: FactSet Research Systems and company filings as of May 31, 2015.
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Other
Information
William Blair
Other Information
Equity Offerings
Initial Public Offerings
Market Capitalization at Pricing /
LTM
LTM Net
Revenue
Income
Completion
Date
Company
Price
04/15/15
Virtu Financial
$19.00
16.5
$314.1
1.01x
12.8x
10/29/14
Fifth Street Asset Management
17.00
6.9
117.3
0.84
NMF
10/08/14
OM Asset Management
14.00
22.0
308.0
1.60
NMF
09/23/14
Medley Management
18.00
6.0
108.0
1.69
NMF
04/15/14
Moelis & Co.
25.00
7.5
186.9
2.74
NMF
06/26/13
11.00
5.5
60.6
2.46
6.3
06/05/13
RCS Capital Corp.
20.00
2.5
50.0
2.15
NMF
03/06/13
Artisan Partners Asset Management
30.00
12.7
381.0
4.06
NMF
05/02/12
The Carlyle Group
25.00
35.1
876.9
NMF
NMF
04/11/12
Oaktree Capital Group
42.39
11.3
476.9
3.06
NMF
02/08/12
FX Alliance
12.00
6.0
71.8
2.35
10.6
11/17/11
Manning & Napier
12.00
13.6
163.0
3.30
11.6
03/29/11
Apollo Global Management
19.00
29.8
565.4
1.38
17.5
12/14/10
9.00
9.0
81.0
1.50
9.5
12/01/10
FXCM
14.00
17.3
242.5
3.22
10.8
11/17/10
LPL Investment Holdings
30.00
17.2
516.7
1.08
NMF
11/09/10
Noah Holdings
12.00
9.7
115.9
4.88
17.3
Shares(1)
Amount(1)
(1) Amount in millions; includes overallotment.
Sources: Dealogic and William Blair’s Merger and Acquisitions market analysis.
Follow-On Equity Offerings
Completion
Date
Company
06/01/15
Carlyle Group
04/20/15
Price
Shares(1)
Amount(1)
Market Capitalization at Pricing /
LTM
LTM Net
Revenue
Income
$30.07
7.0
$210.5
0.63x
20.1x
Brookfield Asset Management
56.00
17.9
1,000.2
2.21
13.5
03/03/15
46.08
3.8
176.5
2.02
20.8
03/02/15
54.24
4.0
217.0
NMF
18.7
11/18/14
Moelis & Co.
31.80
5.5
174.9
0.92
11.2
06/13/14
55.17
1.8
101.5
5.30
NMF
06/05/14
RCS Capital Corp.
20.25
27.6
558.9
1.68
NMF
03/13/14
Fortress Investment Group
8.04
32.5
261.3
3.43
18.0
03/06/14
62.00
9.3
576.6
7.75
NMF
03/05/14
59.33
5.8
344.1
NMF
NMF
03/04/14
Carlyle Group
33.50
13.8
462.3
0.48
20.4
10/31/13
56.00
5.5
309.1
6.71
NMF
09/11/13
Virtus Investment Partners
155.00
1.3
201.2
3.34
17.3
06/05/13
Carlyle Group
27.00
11.7
314.7
0.41
NMF
05/22/13
53.50
8.1
430.7
NMF
NMF
05/09/13
Apollo Global Management
25.00
24.3
606.9
1.07
7.8
03/13/13
E*Trade Financial Corp.
11.35
28.5
323.8
2.48
NMF
11/14/12
WisdomTree Investments
6.10
25.6
156.3
NMF
NMF
08/06/12
Duff & Phelps Corp.
13.50
3.0
40.5
1.32
26.3
(1) Amount in millions; includes overallotment.
Sources: Dealogic and William Blair’s Merger and Acquisitions market analysis.
20 Other Information
William Blair
Debt Offerings
Price
Redemption
Date
Date
Company
Offering Description
05/12/15
Blackstone Holdings Finance Co.
2.000% Senior notes
NA
$300.0
05/19/25
04/28/15
BlackRock
1.250% Senior unsecured notes
$99.7
700.0
05/06/25
03/25/15
Franklin Resources
99.8
400.0
03/30/25
03/10/15
KCG Holdings
6.875% Senior secured notes
96.7
500.0
03/15/20
03/04/15
CME Group
99.8
750.0
03/15/25
03/04/15
TD Ameritrade Holding Corporation
99.8
750.0
04/01/22
03/03/15
Charles Schwab Corporation
99.9
625.0
03/10/18
03/02/15
E*TRADE Financial Corporation
100.0
460.0
09/15/23
02/19/15
BGC Partners, Inc.
NA
300.0
12/09/19
02/10/15
Affiliated Managers Group
99.2
350.0
08/01/25
02/10/15
Lazard Group
99.7
400.0
02/13/25
01/12/15
100.0
500.0
01/15/25
12/04/14
BGC Partners, Inc.
NA
300.0
12/09/19
11/12/14
100.0
540.0
11/15/22
10/17/14
TD Ameritrade Holding Corporation
100.0
500.0
04/01/25
10/03/14
Cowen Group
100.0
55.0
10/15/21
07/15/14
99.2
300.0
07/18/24
07/11/14
Oaktree Capital Management
3.910% Series A senior unsecured notes
100.0
50.0
09/03/24
07/11/14
Oaktree Capital Management
4.010% Series B senior unsecured notes
100.0
100.0
09/03/26
06/23/14
Legg Mason
106.5
150.0
01/15/44
06/23/14
Legg Mason
99.8
250.0
07/15/19
06/02/14
Piper Jaffray Companies
Floating rate class A senior unsecured notes
100.0
50.0
05/31/17
05/13/14
Jefferies Group
99.7
500.0
05/20/20
04/29/14
5.000% Senior unsecured convertible notes
66.7
120.0
11/01/21
04/02/14
Blackstone Holdings Finance Co.
NA
500.0
06/15/44
03/13/14
BlackRock
NA
30.0
03/31/34
03/05/14
Carlyle Holdings II Finance
104.3
200.0
03/30/43
03/04/14
Cowen Group
3.000% Senior cash convertible unsecured notes
NA
130.0
03/15/19
02/06/14
99.1
400.0
02/15/24
01/23/14
4.820% Unsecured medium-term notes
100.0
500.0
01/28/26
01/22/14
JMP Group
100.0
42.0
01/15/21
01/16/14
Legg Mason
98.4
400.0
01/15/44
11/06/13
Lazard Group
99.7
500.0
11/14/20
10/17/13
5.040% Medium-term notes
100.5
200.0
03/08/24
10/01/13
IntercontinentalExchange Group
99.2
800.0
10/15/23
10/01/13
IntercontinentalExchange Group
99.9
600.0
10/15/18
09/30/13
TMX Group
3.253% Series A senior unsecured debentures
NA
400.0
10/03/18
09/30/13
TMX Group
Floating rate series C senior unsecured debentures
NA
350.0
10/03/16
09/04/13
5.950% Senior unsecured debentures
96.1
125.0
06/14/35
09/04/13
5.040% Medium-term notes
100.0
300.0
03/08/24
09/04/13
CME Group
99.8
750.0
09/15/43
07/22/13
Charles Schwab Corporation
100.0
275.0
07/25/18
07/15/13
INTL FCStone
100.0
40.0
07/30/20
01/17/13
JMP Group
100.0
40.0
01/15/23
01/15/13
Jefferies Group
99.7
600.0
01/20/23
01/15/13
Jefferies Group
98.8
400.0
01/20/43
11/06/12
800.0
100.0
11/15/19
11/05/12
Invesco Finance
600.0
99.9
11/30/22
10/03/12
125.0
100.0
10/15/22
09/19/12
Franklin Resources
300.0
99.5
09/15/17
Amount(1)
(1) Amount in millions.
Other Information 21
William Blair
Financial Services & Technology Analysts and Coverage
Insurance Brokers and Property
and Casualty Insurance
Adam Klauber, CFA
Financial Technology and
Specialty Finance
Robert Napoli
Asset Management and
Financial Technology
Chris Shutler, CFA

























































Allstate Corporation (The) (ALL)
American International Group, Inc. (AIG)
AmTrust Financial Services, Inc. (AFSI)
Aon plc (AON)
Argo Group International Holdings, Ltd.
(AGII)
Arthur J. Gallagher & Co. (AJG)
Benefitfocus, Inc. (BNFT)
Brown & Brown, Inc. (BRO)
Chubb Corporation (The) (CB)
CNA Financial Corporation (CNA)
Connecture, Inc. (CNXR)
Crawford & Company (CRD.A)
Crawford & Company (CRD.B)
eHealth, Inc. (EHTH)
Erie Indemnity Company (ERIE)
Federated National Holding Company (FNHC)
HCC Insurance Holdings, Inc. (HCC)
Kemper Corporation (KMPR)
Markel Corporation (MKL)
Marsh & McLennan Companies, Inc. (MMC)
National General Holdings Corp. (NGHC)
National Interstate Corporation (NATL)
Navigators Group, Inc. (The) (NAVG)
Patriot National, Inc. (PN)
Progressive Corporation (The) (PGR)
RLI Corp. (RLI)
Travelers Companies, Inc. (The) (TRV)
WebMD Health Corp. (WBMD)
Willis Group Holdings Public Limited
Company (WSH)
Alliance Data Systems Corporation (ADS)
American Express Company (AXP)
Bottomline Technologies, Inc. (EPAY)
CAI International, Inc. (CAP)
Capital One Financial Corporation (COF)
Cardtronics, Inc. (CATM)
Compass Diversified Holdings (CODI)
Discover Financial Services (DFS)
Encore Capital Group, Inc. (ECPG)
EVERTEC, Inc. (EVTC)
Financial Engines, Inc. (FNGN)
Garrison Capital Inc. (GARS)
Green Dot Corporation (GDOT)
Harvest Capital Credit Corporation (HCAP)
Independence Realty Trust, Inc. (IRT)
Marlin Business Services Corp. (MRLN)
MasterCard Incorporated (MA)
MoneyGram International, Inc. (MGI)
Monroe Capital Corporation (MRCC)
Performant Financial Corporation (PFMT)
PRA Group (PRAA)
QIWI plc (QIWI)
Visa Inc. (V)
WageWorks, Inc. (WAGE)
Western Union Company (The) (WU)
WEX Inc. (WEX)
22 Financial Services & Technology Analysts and Coverage

















Affiliated Managers Group, Inc. (AMG)
Artisan Partners Asset Management Inc.
(APAM)
Charles Schwab Corporation (The) (SCHW)
Eaton Vance Corp. (EV)
Envestnet, Inc. (ENV)
Euronet Worldwide, Inc. (EEFT)
Fiserv, Inc. (FISV)
Global Payments, Inc. (GPN)
Heartland Payment Systems, Inc. (HPY)
Invesco Ltd. (IVZ)
LPL Financial Holdings Inc. (LPLA)
MSCI Inc. (MSCI)
SEI Investments Company (SEIC)
SS&C Technologies Holdings, Inc. (SSNC)
T. Rowe Price Group, Inc. (TROW)
TD Ameritrade Holding Corporation (AMTD)
Vantiv, Inc. (VNTV)
Waddell & Reed Financial, Inc. (WDR)
WisdomTree Investments, Inc. (WETF)
William Blair
Investment Banking Team Biographies
William Blair Financial Services Investment Banking
Robert Metzger, Managing Director, joined William Blair in 1999. While at William Blair and in his prior position at ABN AMRO, he
focuses on the corporate finance needs of insurance, financial technology, and specialty finance companies. Mr. Metzger graduated in
1989 with highest honors from the University of Illinois, receiving a B.S. in accountancy. In 1995, he graduated with distinction from
Northwestern University’s J.L. Kellogg Graduate School of Management, receiving an M.B.A. in finance and strategy. He is a Certified
Public Accountant.
[email protected]
+1 312 364 8517
J.P. Young, Managing Director, is a member of the financial services industry group, where he focuses on the corporate finance needs
of asset managers, broker-dealers, and specialty finance companies. Mr. Young joined William Blair’s investment banking group in
2009 from Macquarie Capital and began his investment banking career in 2000 at Piper Jaffray. He has extensive experience providing
M&A advisory services and raising public and private equity capital for clients. Mr. Young received a B.S. from Lehigh University and an
M.S. from the University of Chicago.
[email protected]
+1 312 364 8160
Matthew Zimmer, Managing Director, is a member of William Blair’s investment banking group. Before joining the firm, he worked
with Robert W. Baird & Co. in the investment banking group for five years, where he specialized in M&A and equity underwriting. Mr.
Zimmer has 11 years of experience advising public and private companies and has been involved in sell-side and buy-side transactions,
strategic option studies, fairness opinions, and special committee situations. He graduated from the University of Notre Dame. In 2005,
he graduated from Columbia Business School, receiving an M.B.A. with a concentration in finance and economics. He is a Certified
Public Accountant.
[email protected]
+44 207 868 4502
Investment Banking Team Biographies 23
William Blair
Select William Blair Transactions
Not Disclosed
$41,839,875
$165,000,000
$27,500,000
Lightyear Capital
Follow-on Offering
Preferred Stock
Direct Unsecured Notes
June 2015
April 2015
March 2015
January 2015
$172,500,000
A$193,000,000
$47,000,000
$80,000,000
has been acquired by
has merged with
Convertible
Bond Offering
Treasury Group
Senior Debt
Preferred Stock
December 2014
November 2014
November 2014
September 2014
$76,475,000
$100,000,000
$100,000,000
$60,000,000
Follow-on Offering
Senior Unsecured Notes
Senior Secured Debt
Debt Placement
July 2014
July 2014
June 2014
April 2014
$575,628,894
$66,815,000
$309,120,000
$82,800,000
Follow-on Offering
Follow-on Offering
Follow-on Offering
Initial Public Offering
March 2014
January 2014
November 2013
October 2013
$169,708,412
$34,000,000
$59,361,250
Not Disclosed
Follow-on Offering
Follow-on Offering
Encore Capital Group
October 2013
August 2013
July 2013
June 2013
Not Disclosed
£525,000,000
Not Disclosed
$86,250,000
Valuation of
Class A Equity Units
J.C. Flowers & Co. LLC
Valuation of
Class A Equity Units
June 2013
May 2013
December 2012
October 2012
24 Select William Blair Transactions
William Blair
Notes
William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and
Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Conduct Authority
("FCA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or
institutions situated within the United States and are not offered to persons or institutions outside of the United States.
This material has been approved for distribution in the United Kingdom by William Blair International Limited, Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only
made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being “Eligible Counterparties” and Professional Clients). This Document is not to be distributed or passed on to any
“Retail Clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision.
William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com
June 4, 2015
Notes 25
William Blair
Disclosures
26 Disclosures
About William Blair
Investment Banking
William Blair’s investment banking group combines significant transaction experience,
rich industry knowledge, and deep relationships to deliver successful advisory and
financing solutions to our global base of corporate clients. We serve both publicly traded
and privately held companies, executing mergers and acquisitions, growth financing,
financial restructuring, and general advisory projects. This comprehensive suite of
services allows us to be a long-term partner to our clients as they grow and evolve.
From 2010-2014, the investment banking group completed more than 330 merger-andacquisition transactions worth $73 billion in value, involving parties in 36 countries and
five continents, was an underwriter on more than 20% of all U.S. initial public offerings,
and raised nearly $100 billion in public and private financing.

Investment Services Industry Insights

Transcription

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