T Rowe Price agreed to buy fund manager Oak Hill Advisors for $4.2 billion on Thursday, as it seeks to expand its presence in the alternative investments market.

With prospective tie-ups between other mutual fund managers and private equity firms, the cash-and-stock deal might spark additional M&A activity in the asset management market, which has already seen a flurry of deal activity this year.

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Wells Fargo's $2.1 billion sale of its asset management business to private equity firms GTCR LLC and Reverence Capital Partners, as well as Ares Management Corp's $1.1 billion acquisition of Landmark Partners, are two high-profile deals from the sector announced this year.

OHA, based in New York, manages $53 billion in capital across various asset classes as of the end of July. It has raised $19.4 billion in financing since January of last year.

T Rowe, which manages $1.61 trillion in assets and provides mutual funds, account management, and other advisory services, has $1.61 trillion in assets under management as of Sept. 30.

The Oak Hill transaction will be funded with 74% cash and the remainder in T Rowe's ordinary stock. If specific commercial objectives are met by the beginning of 2025, the corporation would pay an additional $900 million, according to the company.

T Rowe Price was advised by Evercore, while OHA was advised by J.P. Morgan Securities and M. Klein & Company.