Mutual Fund Companies' Values Reported
September 6, 1999
The multiples for mutual fund companies are about eight percent less than the multiples for money management firms that run institutional assets, according to data released last week by Putnam, Lovell, de Guardiola & Thornton, the investment banking firm based in San Francisco. Data for year-to-date mergers and acquisitions of institutional and retail money management firms shows that institutional firms are being valued at 9.3 times annual pre-tax earnings and mutual fund companies are being valued at 8.6 times annual pre-tax earnings, the firm said.
However, for publicly-traded firms, the difference is less pronounced. Putnam, Lovell's proxy group of 10 retail firms are trading at 10.3 times pre-tax earnings, slightly less than the firm's proxy group of five institutional firms, which are trading at 10.5 times pre-tax earnings.