Mergers and acquisitions within the asset management industry surged to a record high in 2018, amid ongoing pressure on costs and increasing competition.
According to New York investment bank Sandler O'Neill, asset management deals rose to 253 last year, up from 210 in 2017 and surging past the previous record of 243 in 2007.
The firm calculated the volume of assets changing hands through M&A activity was $3.7trn last year, up 29% from 2017.
The largest transaction last year was Invesco's $5.7bn acquisition of OppenheimerFunds from MassMutual, bringing the firm's total assets under management (AUM) to $1.2trn.
The report said substantial increases in acquisitions on both ends of the AUM spectrum pushed up 2018 transaction activity.
On the larger end, acquisitions of firms with over $25bn in AUM grew from 17 deals to 28 in 2018 while on the lower end, asset managers with less than $1bn in AUM were involved in 96 deals last year compared to 67 in 2017.
US firms were involved with the majority of deal activity last year, representing 61% of acquisitions, while Europe (ex-UK) accounted for 14% of activity and the UK was third with 12%.
However, giving its outlook for M&A activity for this year, the report predicted there to be "heightened selectivity" if the market volatility seen at the end of 2018 continued into this year.
"Buyers will be forced to balance the desire to grow now against concerns about the market conditions ahead," it added.