A strong majority, 87%, of North American wealth management and private banking businesses indicate that they intend to pursue growth in their sector by acquisition over the next three years, according to a new survey sponsored by KPMG.

That’s up sharply from levels of M&A activity in the past three years when less than 50% of those surveyed made an acquisition.

Of all the regions surveyed, North America further demonstrated the strongest affinity for growth by acquisition, with 27% indicating that it was a lot more important than pursuing organic growth.

In contrast, firms in the Asia Pacific market demonstrate a pronounced preference for organic growth, with 54% citing this as most important to their business strategy.

In addition, 33% of Asia Pacific respondents noted that the primary reason for a planned acquisition breaking down in their market was price, while in North America it was significantly higher with 86% citing price as the deal breaker.

“Clearly, this distinction in organic growth between North America and Asia Pacific simply comes down to the difference in the maturity of these respective financial services markets,” says Georges Pigeon, a financial institutions professional at KPMG’s advisory services practice in Montreal. “As the Asia Pacific market is much younger than the market here in North America, its opportunities for organic growth are stronger. In comparison, the market in North America is already highly saturated with less room for organic growth, forcing buyers to pay significantly higher prices to acquire a competitor.”

The survey, conducted in April and May 2005, contacted 87 respondents at private banks and wealth management firms around the world.

Overall, the global wealth management and private banking industry is thriving with a 26% increase in transactions from 2003. The Asia Pacific region remains the most active market globally with 38% of all transactions, although North America follows closely behind with 37% of all deals. Meanwhile, the volume of deals in Europe is in its fourth year of decline, and reflects the general downturn in European transaction activity.

The survey, conducted in April and May 2005, contacted 87 respondents at private banks and wealth management firms around the world.