As financial markets dampen RIA valuations, buyers get creative with deal structures

A report from DeVoe & Co. shows dramatic drop-off in fourth-quarter deals, but the biggest buyers say they are as busy as ever.

With just three deals during the last three weeks of October, an 81% drop from the monthly average of the last 12 months, and a similarly sluggish outlook for the November, the writing is on the wall, said David DeVoe, founder and chief executive of the research firm.

“The wheels fell off the M&A train in early October,” DeVoe said. “2022 delivered three quarters of unexpectedly strong activity, given the market environment. High interest rates, a declining stock market and a challenging economic environment typically drive down M&A. It remains to be seen if these pressure points are creating a short-term lumpiness of volume or a sustained downturn.”