Affiliated Managers Group agreed to acquire a majority equity stake in ESG-dedicated money manager Parnassus Investments.
Terms of the deal were not disclosed, a spokeswoman confirmed.
Parnassus partners will continue to own a substantial portion of the firm’s equity and will direct its day-to-day operations, a move that is consistent across AMG affiliate firms, a news release said. The Parnassus investment team will remain independent.
Benjamin Allen, CEO, portfolio manager and trustee, and Todd Ahlsten, CIO and portfolio manager, will enter into long-term employment agreements under the deal.
Parnassus had $47 billion in assets under management as of June 30 and invests in companies that have a positive impact on society.
The deal is set to close by the end of the year, subject to closing conditions and regulatory approvals.
AMG affiliates had a total $738 billion in assets under management as of March 31. The stake in Parnassus brings its ESG-dedicated AUM to about $80 billion, while its AUM that incorporates ESG factors into the investment process will increase to about $600 billion.
“Having known the senior partners for more than a decade, AMG has developed a unique relationship with this team and closely followed the evolution of their business,” Jay C. Horgen, president and CEO of AMG, said in the release.
The acquisition follows the retirement of Jerome Dodson, founder of Parnassus, from portfolio management and all managerial duties last year.
The investment in Parnassus is expected to contribute about $70 million to AMG’s adjusted earnings before interest, tax, depreciation and amortization and $1.30 to economic earnings per share in 2022.
The deal will be funded with existing corporate resources, the release said.