AMG Invests in ESG Fund Manager Parnassus
Posted on 07/06/2021
With approximately $47 billion under management as of June 30, 2021, Parnassus Investments has focused on active responsible investing for more than 35 years. Founded in San Francisco in 1984, the firm integrates deep fundamental and environmental, social, and governance (ESG) research into its collaborative, high-conviction, low turnover investment process. Affiliated Managers Group, Inc. (NYSE: AMG) entered into a definitive agreement to acquire a majority equity interest in Parnassus Investments. After the closing of the transaction, Parnassus partners will continue to own a substantial portion of the equity of the firm and direct its day-to-day operations consistent with AMG’s partnership approach.
The closing of the transaction will represent the culmination of the transition from founder Jerome Dodson, who retired from portfolio management and all managerial duties in 2020, to the next generation of leadership. Dodson and his family will no longer retain any ownership of Parnassus. Jerome Dodson founded Parnassus Investments in the basement of his house in 1984.
The terms of the transaction were not disclosed. AMG expects that the investment in Parnassus will contribute approximately US$ 70 million to Adjusted EBITDA and US$ 1.30 to Economic earnings per share in 2022, and the transaction will be funded with existing corporate resources. Mr. Allen and Mr. Ahlsten will enter into long-term employment agreements with the firm. The transaction, which is expected to close during the second half of 2021, is subject to customary closing conditions and regulatory approvals.
Moelis & Company LLC acted as exclusive financial advisor to Parnassus Investments.