With investor demand for fixed income expected to remain positive into 2010 and flows into equities showing signs of life, asset management firms are poised for growth, making them attractive targets for acquisitions, according to a new Keefe, Bruyette & Woods Inc. report.

Merger-and-acquisition activity is making a comeback, and KBW said, "the long-term conditions remain ripe for continued M&A activity in the asset management industry." The report cites some of the most recent industry deals, including BlackRock's purchase of Barclays Global Investors for $13.5 billion, which was announced in June 2009 and has since closed, and Invesco's deal for Morgan Stanley's retail asset management business for $1.5 billion, which was announced in October 2009 and is expected to close in the second quarter of 2010.

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