New figures show that 2017 was a global M&A bonanza.

Mergers and acquisitions among investment managers in 2017 reached levels not seen since 2009, as the sector was under intensified pressure to consolidate amid rising compliance costs.

Last year, the total value of deals was $40.9 billion, a record-high since the aftermath of the financial crisis. However, the volume of transactions tumbled to its lowest since 2006, reflecting a trend of fewer but bigger deals sealed by medium-sized players, according to new figures compiled for the Financial Times by Dealogic, the research house. 

The increasing popularity of low-cost, passive investment vehicles like exchange-traded funds (ETFs), coupled with pressure on management fees and the inflated costs of equity research under MiFID II are squeezing profit margins. As a result, asset managers are striking more deals than ever before, in particular as mid-tier firms look to partner with rivals in order to boost their market presence and trim regulatory fees. 

“These types of mergers tend to be a convergence of weak companies that have suffered net outflows,” Phil Dobbin, equity analyst at Jefferies, told the FT. “They are aimed at getting bigger, getting more diverse and offsetting some pressure on fees. But they tend to come from a position of weakness.” 

The biggest deal of 2017 was the merger of Standard Life and Aberdeen Asset Management, which formed a UK-based giant with a market value of £11 billion ($15.1 billion).

In second place was the purchase of Fortress Investments, the US alternatives manager, by Japan’s SoftBank Group, for $3.3 billion. 

The largest share of the overall figure came from Europe, where deals amounted to $15.6 billion. Closely behind was North America with $13.3 billion and Asia-Pacific with $10.6 billion.

In total, there were 781 deals announced last year, compared with 853 in 2016 and 1,196 in 2011.