GLOBAL - The sale of asset management businesses worldwide in the first half of 2006 hit the highest level ever, according to a new report.

The disclosed and estimated value of transactions was $13.5bn (€10.7bn) and the acquired assets under management jumped to $992bn, according to Putnam Lovell NBF's new mid-year M&A review entitled ‘Storm Front'.

The surge - the highest level in any six-month period so far - saw the number of deals increase to 89 from 59 in the first half of 2005. During the same period last year, the value of transactions stood at $8.3bn, and acquired AUM amounted to $737bn.

Furthermore, 2006 could be on its way to overtaking 2000 as the record year for ‘dealmaking' in the global fund industry.

In 2000, the amount of assets acquired reached $1.4trn and the total deal value was approximately $30bn - powered by takeovers of publicly traded companies and cross-border transactions, said international investment banking firm.

This year alone has witnessed the largest asset management deal in history - BlackRock's purchase announced in February of Merrill Lynch's fund management operations in exchange for a 49.8% stake in the publicly traded company.

And there's also been the biggest management buyout ever by asset size in the fund management sector - the acquisition of Gartmore Investment Management's European business by its executives and private equity firm Hellman & Friedman in May.

The disposal of fund management operations came as financial firms withdrew to their core operations, as well as sustained enthusiasm for alternative investments, increased interest in the sector from private equity firms flush with cash, and a pickup in cross-border transactions, said the review.

"The asset management sector worldwide remains buoyant, with robust deal flow and stronger valuations, even as global markets have taken a beating in recent months,'' said Putnam Lovell managing director and investment banking head Steven Pierson.

"We expect sustained activity ahead as strategic and financial buyers alike purchase market share in the traditional and alternative segments of the asset management industry, and in the financial technology segment that supports fund management businesses.''