The fund management industry continues to evolve rapidly, driven by technological advancements, shifting investor preferences and an increasingly competitive landscape. Amid this transformation, mergers and acquisitions (M&A) remain a strategic option for firms seeking growth and scalability. Among various M&A strategies, lift-outs—where a team or business unit is transitioned from one firm to another—have gained traction as a targeted and cost-effective approach to acquiring talent, expertise and established client relationships.
Fund managers are increasingly turning to strategic acquisitions to scale their operations, enter new markets and address the evolving demands of a dynamic investment environment. Lift-outs are emerging as a focused and agile alternative for executing M&A strategies. This approach enables firms to target specific business functions or operational needs without the complexity of full-scale mergers. By offering greater flexibility and speed, lift-outs provide a practical solution for firms looking to adapt and thrive in an ever-evolving market.
The M&A Momentum for 2025
According to industry predictions, the momentum for M&A in 2025 is expected to continue rising. Several factors are driving this trend, including ongoing digital transformation and shifting client preferences for more personalized investment solutions. The need to consolidate and innovate will push fund managers to view strategic acquisitions as a key avenue for growth.
Market predictions indicate that as fund managers integrate more digital capabilities, competition for market share will intensify. M&A activity is likely to focus on acquiring firms with robust technological infrastructure and innovative solutions that can quickly adapt to changing market conditions.
The impact of digital transformation will play a significant role in shaping M&A activity. Digital solutions that enhance the customer experience and improve operational efficiency will be in high demand. Firms that embrace data analytics, AI and automation will lead the way in 2025, making M&A an essential strategy for quickly acquiring these capabilities.
The Case for Lift-Outs
Traditional M&A integration often involves merging entire operations, which can be both costly and disruptive. Lift-outs, however, offer a more targeted approach by focusing on specific business functions or teams, rather than integrating full-scale operations.
This focused approach allows acquirers to zero in on particular operational areas—such as transfer agency or fund administration—without the need to overhaul the entire organization. It enables companies to achieve their objectives without unnecessary complexities.
Lift-outs also bring efficiency to the execution process. By focusing on specific areas, they streamline integration, reducing operational costs by eliminating large tech stacks and excessive staffing expenses. This approach increases speed and scalability, allowing firms to rapidly integrate only the critical areas they need while maintaining agility. By optimizing non-core functions without disrupting core operations or culture, lift-outs provide a practical solution for firms aiming to adapt swiftly and efficiently.
SS&C’s Role
SS&C actively identifies and acquires middle- and back-office teams to strengthen our service offerings and expand our client base. Unlike traditional M&A facilitators, SS&C directly integrates these teams, leveraging our expertise to enhance operational efficiency and scalability for asset managers. Our Lift-Out Solutions provide:
Lift-outs have become a key tool for fund managers, providing tailored solutions for targeted and agile M&A. SS&C has a proven track record in M&A, completing over 65 acquisitions and lift-outs and integrating more than 20,000 employees—including 2,000 via lift-outs (as of 2023). Building on this success, we strengthened our market position by securing major deals. By directly acquiring and managing middle- and back-office teams, SS&C empowers fund managers to navigate the evolving landscape with confidence, ensuring long-term success through operational excellence and innovation.
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