'Overlooking' corporate culture in M&A process could hurt investment firms' success

With mergers and acquisitions continuing at pace in the investment industry, research by advocacy group City Hive has warned that many firms are "overlooking" corporate culture.

According to its latest report, Promises and Pitfalls: Finding good client stewardship amid investment M&A, City Hive said that although the investment industry is undergoing significant consolidation, the disruption associated with M&A can lead to a failure to consider corporate culture and fit.

If this is not integrated into M&A decisions, talent, processes and client services could soon unravel relationships and long-trusted brands long after legal matters have been resolved, the report found.

Changes to business structures are being driven by the need to consolidate, acquire assets or access new markets or strategies, with the pressure to demonstrate value for money only increasing, said City Hive co-CEO Mandy Kirby.

Understanding what is important about the M&A process will help the directly and indirectly involved parties to make better decisions about their business relationships and asset stewardship, the report noted.

"This is particularly relevant as the UK's Consumer Duty, a lens through which M&A-driven product changes, fee structures and service models are viewed, will continue to shape operations," Kirby added.

The report was compiled from responses from City Hive's ACT Stewardship Council, members of which are responsible for over £2trn in assets under advice, and include fund buyers, analysts and asset managers.

The number of signatories to the ACT Corporate Culture Standard – a disclosure framework that helps signatories with a standardised way to understand, create, progress and report cultural change – increased by 43% in 2025, with Aberdeen and Royal London Asset Management among the 11 asset managers joining the initiative that year.