Many firms acquiring asset managers are paying too much for businesses that are not as profitable, according to a report from Cerulli Associates, the strategic research and consulting firm.

The report also said that in most cases the new subsidiaries end up growing at a slower rate than their peers. The research examined more than 300 mergers and acquisitions done in the fund management sector since 1990, and found that about 65% of the US target firms analysed failed to grow faster after an M&A transaction in terms of assets under management.