2020 Review of Asset and Wealth Management M&A Environment MHB Advisers, LLC Securities offered through Burch & Company, Inc., 4151 N. Mulberry Drive, Suite 235, Kansas City, MO 64116 member FINRA (www.finra.org) / SIPC (www.sipc.org). Burch & Company, Inc. and MHB Advisers, LLC are not affiliated entities. Asset and Wealth Management M&A Environment 2020 Highlights 1. All-time high global M&A volumes for the fourth year in a row – We counted a total of 335 announced transactions, up 5% Y-o-Y, all in the midst of a global pandemic 2. Transactions among wealth managers continued at a torrid pace – A record 189 WM deals announced, 16% more than last year’s record tally – A flood of private equity into acquisitive national WM platforms has, in turn, fueled even more M&A activity 3. Franklin’s acquisition of Legg Mason signaled the start of massive shake-up in the global AM industry – In Q4, publicly-traded managers Eaton Vance and Waddell & Reed were acquired, adding scale and diversification to Morgan Stanley Investment Management and Macquarie Asset Management, respectively – Speculation of more large-scale transactions potentially involving AMP, BMO GAM, Lyxor, SSGA and Wells AM, which collectively manage more than $4.25 trillion of AUM 4. Despite several sizable deals noted above, there was a dearth of traditional AM transactions in 2020 – Fewest number of such deals in 10 years as several well-publicized headwinds persist, scale becomes imperative 5. Demand has remained strong for well-established alternative managers across the private markets – Private equity, alternative credit and real estate among preferred targets for both strategic and GP-stake buyers 6. Transaction multiples were highly dispersed in a very uncertain economic environment – However, pricing for the most unique and high-quality opportunities continued to be exceptionally strong – Earnout proportions increased as a means to balance risk CONFIDENTIAL – NOT FOR REDISTRIBUTION 2 Asset and Wealth Management M&A Environment Global Transaction Volumes and Comparison to Same Periods in 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Total 10% 10% Announced 73 73 86 18% 103 21% 335 5% Transactions Traditional / 24% 38% 20% 32% Diversified 13 15 19 6% 20 57 Asset Managers Alternative 20 15 12% 18 14% 26 79 Asset Managers 18% 44% 8% Wealth 40 15% 43 49 57 189 Managers 8% 44% 36% 16% Source: MHB Advisers. Data as of December 31, 2020. CONFIDENTIAL – NOT FOR REDISTRIBUTION 3 Asset and Wealth Management M&A Environment Takeaways from the Pandemic – We expected a decline in M&A volumes during a year beset by a global pandemic and related travel restrictions. And yet 2020 was the busiest year ever in the asset/wealth management space. Deal activity is – A temporary lull in Q2 gave way to a record-setting number of deal announcements in Q4 as hopes accelerating grew for a vaccine and the uncertainty around the US elections lifted – This acceleration in transaction activity shows no signs of slowing down as January 2021 was another blockbuster month for wealth management M&A – Travel bans and work-from-home orders certainly slowed M&A processes down initially, but the crisis Buyers and seems to have cratered only the most tenuous of transactions sellers are – Buyers and sellers have swiftly adopted remote meeting and due diligence technology and practices, resilient and which are here to stay adaptive – While many prominent buyers are staying on the sidelines until extensive in-person diligence becomes more practical, a surprising number of transactions were completed entirely over Zoom – Only modest changes in overall M&A pricing during the year: • Unattractive firms couldn’t sell at all, no different than in other environments Pricing and • Moderately attractive firms saw little to no price reductions, but more deferred consideration terms remain favorable • Highly attractive firms still commanded premium pricing and interest from multiple parties • Those firms that continued to grow through the pandemic became even more valuable, as they demonstrated resilience and passed the ultimate ‘stress test’ CONFIDENTIAL – NOT FOR REDISTRIBUTION 4 Asset and Wealth Management M&A Environment Notable Transactions by Segment Select Transactions Announced in 2020 Segment Date Target Country Strategy / Focus Buyer Country AUM (US$B) % Acquired Dec-20 Waddell & Reed Financial US Diversified equity and FI manager Macquarie Group Australia 131.0 100% Oct-20 Eaton Vance US Diversified equity, FI and index manager Morgan Stanley US 517.0 100% Traditional / Diversified Aug-20 MLC Wealth Australia Wealth and asset manager IOOF Australia 227.6 100% Asset Managers Jul-20 Barrow, Hanley, Mewhinney & Strauss US Value equity and FI manager Perpetual Australia 44.1 75% Feb-20 Legg Mason US Diversified global asset manager Franklin Resources US 806.0 100% Dec-20 Owl Rock and Dyal Capital Partners US Private equity and direct lending Altimar Acquisition Corp. US 47.0 Majority Oct-20 Crescent Capital Group US Mezzanine, direct lending, HY, loans Sun Life Financial Canada 28.0 51% Alternative Asset Sep-20 StepStone Group US PE, infrastructure, private debt and RE IPO US 66.0 21% Managers Aug-20 GCM Grosvenor US PE, infrastructure, RE and credit CF Finance Acquisition Corp. US 57.0 Minority Jul-20 Permira UK Private equity and credit Goldman Sachs Petershill Fund US 55.2 Minority Dec-20 Waddell & Reed’s WM business US Wealth manager LPL Financial US 63.0 100% Nov-20 Iconiq Capital US Wealth manager Dyal Capital Partners US 43.0 6% Wealth Jun-20 Captrust Financial Advisors US Wealth manager GTCR US 47.0 25% Managers May-20 Colonial First State Australia Wealth manager KKR US 87.9 55% Feb-20 Creative Planning US Wealth manager General Atlantic US 50.0 Minority Source: MHB Advisers. Data as of December 31, 2020. CONFIDENTIAL – NOT FOR REDISTRIBUTION 5 Asset and Wealth Management M&A Environment Global Transaction Trends Global transaction volumes increased for the 7th year in a row to an all-time high 335 announced deals, fueled by the continuing boom in the wealth management space – Put in context, 2020 volumes were nearly 40% higher than the 10-year average and almost 2x the volume in 2014 The amount of AUM transacted has also rebounded on the back of a handful of sizable transactions in the US… – Publicly traded managers: Franklin/Legg, Morgan Stanley/Eaton Vance, Macquarie/Waddell & Reed – Private markets firms: Owl Rock/Dyal and GCM Grosvenor SPAC deals, StepStone IPO …as well as a few large bank divestitures in Australia, continuing a headlong retreat from wealth by the Four Pillars – Colonial First State from Commonwealth Bank, MLC from NAB Global Transaction Volume AUM Transacted Source: MHB Advisers. Data as of December 31, 2020. CONFIDENTIAL – NOT FOR REDISTRIBUTION 6 Asset and Wealth Management M&A Environment Global Transaction Participants – Buyers While the general make-up of the buyer universe has remained steady for the last several years, new participants and novel investment vehicles have provided sellers with a broader range of transaction alternatives – Firms with “multi-affiliate” or “aggregator” models continue to be the most active acquirers, particularly in the alternative asset management and wealth management spaces – Global banks, B-Ds and insurers continue to be less active but occasionally important transaction participants – Traditional PE sponsor activity has remained steady, and in some segments (notably wealth management) PE firms are successfully competing with strategic buyers; many have also capitalized on strong market pricing in recent years by exiting portfolio positions often to other sponsors or sponsor-backed entities – Permanent capital vehicles set up by Dyal, GS Petershill, Kudu, Rosemont and others have been active in making minority investments, providing growth capital and/or liquidity to attractive independent firms Buyers by Type (by Deal Count) Buyers by Type (by AUM Acquired) Source: MHB Advisers. Data as of December 31, 2020. CONFIDENTIAL – NOT FOR REDISTRIBUTION 7 Asset and Wealth Management M&A Environment Global Transaction Participants – Targets/Sellers Headwinds facing traditional active asset managers have caused a shift in buyer demand toward private markets managers with unique strategies and “sticky” assets – Private equity, real estate and infrastructure managers as well as alternative credit managers have been particularly attractive to buyers seeking non-correlated returns and differentiated yield strategies – Long-term locked-up capital is seen as the antidote to unfavorable asset flow trends impacting many traditional liquid active managers Wealth manager transaction volumes have been hitting all-time highs in recent years, driven by a number of factors including the aging of the advisor community and a desire for scale in the face of increasing costs and regulation – A broad universe of well-funded buyers including larger RIAs, some banks and other serial acquirers (many private equity backed) continue to find attractive opportunities in this highly fragmented industry Targets by Type (by Deal Count) Targets by Type (by AUM) Source: MHB Advisers. Data as of December 31, 2020. CONFIDENTIAL – NOT FOR REDISTRIBUTION 8 Asset and Wealth Management M&A Environment Notable Transactions – Franklin / Legg Mason In a landmark transaction announced in February and closed in July, Franklin acquired Legg Mason to create a global powerhouse with a combined $1.5 trillion AUM – Purchase price of $4.5bn cash plus Combined Operating Entities assumption of $2bn of LM debt – Broader set of investment strategies, particularly in alternatives, offered through an expanded global distribution platform – LM affiliates will continue to operate autonomously within enlarged firm Transaction Will Create the World’s 6th Largest Independent Asset Manager Source: Franklin investor presentation, press release. Pro Forma CONFIDENTIAL – NOT FOR REDISTRIBUTION 9 Asset and Wealth Management M&A Environment Notable Transactions – Morgan Stanley / Eaton Vance In October, Morgan Stanley announced it was acquiring Eaton Vance to create a diversified investment management behemoth with a combined $1.2 trillion AUM – Transaction value of approx.