Investor Pulse Research

Edelman Smithfield’s investor pulse research, "Unlocking Value in Financial Services,“ reveals insights from 300 institutional investors on the sector regarding valuation, the merger and acquisition (“M&A”) environment, trends in shareholder activism, and capital allocation.

Fielded between May 2, 2023 and May 12, 2023, respondents included institutional investors in the US, UK, and continental Europe (France, Germany, Switzerland). Of the firms represented by investors, 50% have $50 billion or more assets under management.

The research shows that…

  • Investors see limited opportunity for near-term valuation upside.
  • Companies need to be prepared for shareholder activism. 
  • Industry consolidation is expected to accelerate, and investors want M&A deals to be immediately accretive.
  • Business diversification should be a core component of a company’s strategy.
  • Investors value balance sheet strength in the current environment.

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Unlocking Value in Financial Services


Limited Valuation Upside

87% of investors believe financial services companies are overvalued or fairly valued. Only 13% believe financial services firms are undervalued at current valuations.



Shareholder Activism on the Rise

Most investors expect increased management scrutiny. In addition, roughly three-quarters of investors expect increased shareholder activism in financial services over the next 12 months. Furthermore, the same amount say they are frequently inclined to support activists.



Prioritize the Balance Sheet

Investors rank debt paydown as the best uses of capital for financial services firms, ahead of M&A and organic growth investments.



Immediately Accretive M&A

Roughly three-quarters of investors expect M&A to deliver increased profitability within the first three quarters and 93% say within the first year.



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