Affiliated Managers Group (AMG) has signed a definitive agreement to buy a majority equity interest in US-based Parnassus Investments.
Financial terms of the deal and the size of the ownership were not made public.
The Parnassus partners will continue to own a significant portion of the equity of the firm after the closing of the deal.
Parnassus is an ESG-dedicated fund manager in the US with approximately $47bn in assets under management as of 30 June 2021.
Established in 1984, the firm focuses on an investment process based on deep fundamental and environmental, social, and governance (ESG) research.
With the deal, AMG is targeting to accelerate its move towards ESG investing strategy.
AMG president and CEO Jay Horgen said: “For nearly four decades, and across numerous market cycles, Parnassus has integrated fundamental financial and ESG research with the goal of achieving attractive risk-adjusted returns for its clients.
“As our third Affiliate wholly dedicated to responsible and impact investing, AMG’s partnership with Parnassus further enhances our strategic participation in ESG investing, one of the fastest-growing segments in the investment industry, and an area of increasingly significant focus for clients globally.”
Parnassus CEO Benjamin Allen said that the partnership with AMG enhances the competitive positioning of the company’s business.
According to Allen, AMG’s partnership approach preserves its entrepreneurial and investment-centric culture, which is essential to its clients and team.
“With this new partnership, we are well-positioned to continue to build an enduring, multi-generational, partner-owned investment firm that serves the sustainable investing needs of our clients,” added Allen.
AMG said that the investment in Parnassus is likely to contribute approximately $70m to adjusted EBITDA and $1.30 to economic earnings per share in 2022.
The company will fund the transaction with existing corporate resources.
In February this year, AMG signed a definitive agreement to acquire a minority equity interest in Boston Common Asset Management.