Ensuring Continuity, Clarity and Alignment When Your Asset Manager Undergoes M&A

I was recently invited to speak at the Institutional Investors Circle seminar, joining Shreena Travis of Janus Henderson Investors and Henry Pollard of the City Bridge Foundation for a discussion chaired by Alan Brown of UCIM. Our panel explored a question that is becoming increasingly common across the institutional investment community: what should asset owners do when their trusted manager becomes part of a merger or acquisition that they did not choose? 

The conversation was wide ranging, practical and grounded in the lived experience of charities, endowments and foundations. Many delegates shared stories of transition that went well and others that created real uncertainty. The themes we discussed resonated strongly with my own work advising asset owners, and the slides I presented at the event informed much of what follows.  

This blog post expands on those ideas. While every case is different, there is a clear and repeatable way for asset owners to respond to M&A activity with confidence, clarity and discipline. 

Start with a Comprehensive Review 

When a manager announces a merger or acquisition, the instinctive reaction is often either to do nothing or to react too quickly. The right approach sits between those extremes. The first step is always a structured, comprehensive review. 

You are not simply asking whether the manager still looks broadly similar. You are looking at hard evidence. Has the incumbent manager actually delivered against its mandate on performance, risk, reporting and costs? Have they fulfilled the stewardship responsibilities that matter to you as an organisation? These are factual questions and they require factual answers.  

Alongside the quantitative review sits a more strategic one. Your own priorities may have changed since you appointed the manager. Objectives evolve. ESG expectations shift. Regulatory environments move. Long term asset owners often find themselves reassessing their needs at the same moment that organisational change is happening around them.  

This is why the first question is not about the merger itself. It is about the underlying relationship. Was the mandate still a strong fit even before the M&A event occurred? 

Understand What Is Changing in Reality 

An M&A announcement does not automatically mean your portfolio will be disrupted. It does, however, mean that you must interrogate what is changing and on what timeline. 

The core areas to assess fall into four groups, which I outlined at the IIC session: the investment engine, the product and investment team, client service and governance, and the underlying culture of the firm.  

Each tells you something different. 

• The Investment Engine: This is arguably the most important area. Does the combined organisation strengthen research capability, risk management and process discipline, or does it create instability? Synergies can add value, but cost cuts or role duplication can also erode capability. Clients should not assume that scale automatically leads to improved outcomes. 

  
  

• Product and Investment Team: Here the question is one of continuity. Will the individuals behind the strategy remain, and will they still operate within a structure that allows them to deliver? People change is often the most significant risk indicator. If leadership, CIO oversight or portfolio managers are under pressure or distracted by integration demands, this often shows up in performance later.  

  
  

• Client Service and Governance: Operational integration can lead to changes in reporting, administration, custody arrangements and escalation routes. These may be improvements, but they can equally introduce new friction. Smaller clients in particular often feel the greatest effects of system changes or shifting priorities. 

  
  

• Culture and Incentives: Culture is consistently underestimated. Firms can integrate systems much faster than they can integrate beliefs, behaviours and incentives. If the culture that attracted you to the manager in the first place changes, the investment philosophy may eventually change with it.

ESG, Reputation and the Corporate Parent 

One of the key areas to consider post-M&A is ESG and reputational risks. These sit above the investment engine but often determine whether the relationship remains viable.  

A new parent company may bring different stewardship standards, a different approach to engagement or a different risk appetite. For charities and foundations, alignment of mission and ethics is often as important as financial performance. If headline risk increases or the new parent’s values diverge from yours, you must recognise this early.

Determining the Right Course of Action 

Once you have completed the review and understood what is materially changing, there are three broad paths: retain the manager, wait and monitor, or initiate a change. Each can be the right answer depending on your circumstances.  

• Retain when the investment engine remains strong, the team is stable and there is no meaningful reputational or strategic risk. Continued monitoring is essential, particularly employee turnover. 

  
  

• Wait and monitor when early indicators are inconclusive. This path requires discipline. You must establish in advance what evidence will demonstrate improvement or deterioration. Without clear criteria, waiting becomes passive rather than purposeful. 

  
  

• Change manager when there is significant headline risk, expected disruption to the investment engine, or evidence that better aligned options exist. In these cases an interim passive allocation can create breathing space while you conduct a full re-tender. 

The key question is often not whether the merger will work out for the combined firm. The key question is whether you want your organisation to live through that journey.

Closing Thoughts 

M&A activity in asset management is not slowing. Asset owners will continue to face these situations regularly, and those who navigate them best are those who respond with structure rather than emotion. 

Begin with a comprehensive review. Understand what is changing. Examine culture as closely as performance. And take decisions that protect your long-term objectives, not those of the newly formed organisation. 

Ultimately, continuity, clarity and alignment are not guaranteed by your asset manager. They are maintained by the discipline of your oversight.