Affiliated Managers Group (AMG), a global asset management company and Russell Investments, a subsidiary of Northwestern Mutual Life Insurance, have reached a definitive agreement for AMG to acquire the business of Pantheon Ventures, a Russell Investments subsidiary.
Under the terms of the purchase agreement, AMG will pay approximately $775m in cash with the potential for additional payments over the next five years, contingent on the growth of Pantheon’s business.
Following the closing of the transaction, Pantheon’s management team will own a meaningful stake in the partnership and continue to direct the firm’s day-to-day operations.
However, the transaction will be funded utilizing a combination of AMG’s available cash and existing credit facility. Under the terms of the agreement, 21 management partners of Pantheon will enter into long-term employment agreements with the firm.
Sean Healey, president and CEO of AMG, said: “Our partnership begins an exciting time for Pantheon as the management team will own a substantial stake in the business, further aligning the firm’s interests with its employees and clients. We look forward to working together on a range of initiatives, such as product development, marketing and global operational support.”
Alastair Bruce, managing partner at Pantheon in London, said: “We are enthusiastic about our partnership with AMG. Pantheon operates with a distinct and highly collaborative culture, and it is of paramount importance to our clients and staff that our new partner provide operational autonomy and a stable ownership model through long-term commitments and partnership equity incentives.
“The stability provided by the partnership with AMG, along with its multi-generational approach to equity incentives, is a powerful combination as we strengthen Pantheon’s leading position in private equity fund-of-funds.”
Andrew Doman, president and CEO of Russell Investments, said: “Russell and Pantheon have enjoyed a productive relationship and we look forward to continuing to offer access to, and distribution of, their products and services for the benefit of our clients.”
The transaction, which is expected to close during the second quarter of 2010, is subject to customary closing conditions and regulatory approvals.
Pantheon is a global private equity fund-of-funds manager, delivering private equity investment solutions to a range of clients. Pantheon currently manages approximately $22bn for over 300 global clients, including pension funds, endowments, government bodies and insurance companies. With a team of 63 investment professionals (and a total staff of 141) in offices located in London, San Francisco, New York and Hong Kong.