Affiliated Managers Group Inc (’AMG’), the U.S. money manager holding company, is keeping up their torrid growth. Recently announced is the buyout of UK’s Pantheon Ventures, marking AMG’s fifth acquisition in seven months. AMG looks to be well positioned to be a winner in the asset management industry consolidation trend.

 Torrid Acquisition Pace

Five acquisitions in just seven months is a torrid pace for any business. However, AMG has no intentions of stopping their growth through acquisitions. “We continue to see opportunities in boutique firms around the world,” AMG CEO Sean Healey told Reuters. “We would not hesitate to make additional investments of this size or larger.” So far, the last seven months has seen Pantheon Ventures, British fund firm Artemis Investment Management Ltd,  Aston Asset  Management LLC, Value Partners Group Ltd, and Harding Loevner all get investments or buyouts from AMG.

Why AMG is a Winner

AMG’s unique affiliate structure is much like that of a holding company; they can both benefit from and offer economies of scale as well as offer a broader portfolio of products to Institutional Investors and High Net Worth Clients alike.

The product portfolio offered by AMG enables clients to take advantage of best-in-class portfolio managers and product offerings. Affiliated AMG units benefit from the synergies that may not have been as easily achieved when part of a larger financial services company. Overall, I believe affiliate approach resonates well with investment and asset managers that are looking to recapture their independence and regain management ownership.

Industry Consolidation Trend

AMG is a positioned well and a prime example of the trend towards “pure-play” asset managers – Banks, brokerages, insurance firms are all looking to divest their wealth and asset management units and in 2010, this trend shows no signs of slowing. The industry is currently in a very favorable supply demand balance, especially for boutique firms and alternative investment firms.  Opportunities abound for AMG as well as other “pure-play” asset managers who need increase their scale to compete with the likes of BlackRock.

Conclusion

Other “pure-play” asset managers would do well to follow the lead of Affiliated Managers Group. Those that are well capitalized, have strong brand equity and can offer a unique value proposition to banks, brokerages, insurance firms that are all looking to divest their wealth and asset management units could be big winners. Those managers that can’t keep up are going to be increasingly challenged to win new assets and retain the assets already under management.

Who else is going to be a winner in the asset management industry consolidation trend?