We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Affiliated Managers (AMG) Up on Parnassus Buyout Announcement
Read MoreHide Full Article
Affiliated Managers Group’s (AMG - Free Report) shares jumped 7%, following the acquisition announcement of a majority equity stake in Parnassus Investments, one of the largest sustainable investing fund managers in the United States. The financial terms of the deal, which will be funded through “existing corporate resources,” are not disclosed yet.
Based in San Francisco, Parnassus mixes fundamental and environmental, social, and governance (ESG) research to achieve robust risk-adjusted returns for clients. With more than 35 years of experience in responsible investing, the firm has almost $47 billion assets under management.
Jay C. Horgen, President and CEO of Affiliated Managers said, “We are very pleased to have the opportunity to partner with Parnassus, as we have tremendous respect for its multi-decade work in sustainable investing and the high-quality business built by an outstanding management team.”
Further, Benjamin E. Allen, CEO of Parnassus, noted “Since our founding, we have been committed to remaining independent and investing based on both Principles and Performance. AMG’s unique partnership approach preserves our firm’s entrepreneurial and investment-centric culture, which is essential to our clients and team; the cultural alignment between Parnassus and AMG, with our firms’ respective long-term partnership orientations and strong shared belief in sustainable investing, made our decision clear.”
Deal Details & Benefits
The transaction, still subject to regulatory approvals and customary closing conditions, is expected to close during the second half of the year.
Following the completion, Parnassus’ partners will remain owners of significant part of the equity of the firm and manage day-to-day operations. Also, the Parnassus investment process will not change and the firm’s investment team will remain fully independent. Also, Allen and Todd Ahlsten — CIO and portfolio manager — will enter into long-term employment agreements under the deal.
The addition of Parnassus will increase Affiliated Managers’ ESG-focused assets under management (AUM) balance to nearly $80 billion, with AUM incorporating ESG factors into the investment process to roughly $600 billion.
Further, Affiliated Managers stated, “With more than 95% of its mutual fund AUM in strategies with a Morningstar Rating of 4 or 5 stars, and each of its equity funds maintaining top sustainability ratings, Parnassus intends to provide investors with attractive long-term, risk-adjusted returns by investing in high-quality businesses at reasonable prices.”
Affiliated Managers projects the deal to contribute $70 million to adjusted earnings before interest, taxes, depreciation and amortization as well as $1.30 to economic earnings per share for 2022.
Conclusion
At present, ESG investing is in vogue. The coronavirus pandemic has shifted investors’ interest toward those companies that perform well on ESG targets.
ESG investing is one of the fastest growing segments in the investment management industry. So far this year, ESG-focused funds have attracted huge investments across the globe.
Affiliated Managers’ other investments in sustainable investing fund managers include interests in Boston Common Partners and Inclusive Capital Partners. Backed by these and other similar investments, the company is expected to continue generating meaningful growth over time. Further, rising demand for equity and alternative strategies among institutional clients is expected to keep supporting its profitability.
So far this year, shares of Affiliated Managers have gained 64.1%, outperforming 27.5% growth recorded by the industry.
Many finance companies have started to come ahead and participate in ESG investing over the past couple of years. This June, BlackRock (BLK - Free Report) announced a deal to acquire the Climate Change Scenario Model of Baringa Partners and integrate the same into its own Aladdin risk management system.
Likewise last month, JPMorgan (JPM - Free Report) inked a deal to acquire San Francisco-based start-up, OpenInvest, which provides ESG investment management products. Also, the company, — through the asset management division — announced a deal to acquire Campbell Global, LLC, a forest management and timberland investing company. Through these moves, the bank seeks to directly make its mark on the transition to a low-carbon economy and provide ESG-minded investment opportunities.
Moreover, in November 2020, Moody's (MCO - Free Report) acquired a minority stake in MioTech, as part of its efforts to offer innovative ESG and know your customer solutions to financial markets of China. Also, in 2019, it acquired a majority stake in VigeoEiris, a global leader in ESG research, data and assessments.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Image: Bigstock
Affiliated Managers (AMG) Up on Parnassus Buyout Announcement
Affiliated Managers Group’s (AMG - Free Report) shares jumped 7%, following the acquisition announcement of a majority equity stake in Parnassus Investments, one of the largest sustainable investing fund managers in the United States. The financial terms of the deal, which will be funded through “existing corporate resources,” are not disclosed yet.
Based in San Francisco, Parnassus mixes fundamental and environmental, social, and governance (ESG) research to achieve robust risk-adjusted returns for clients. With more than 35 years of experience in responsible investing, the firm has almost $47 billion assets under management.
Jay C. Horgen, President and CEO of Affiliated Managers said, “We are very pleased to have the opportunity to partner with Parnassus, as we have tremendous respect for its multi-decade work in sustainable investing and the high-quality business built by an outstanding management team.”
Further, Benjamin E. Allen, CEO of Parnassus, noted “Since our founding, we have been committed to remaining independent and investing based on both Principles and Performance. AMG’s unique partnership approach preserves our firm’s entrepreneurial and investment-centric culture, which is essential to our clients and team; the cultural alignment between Parnassus and AMG, with our firms’ respective long-term partnership orientations and strong shared belief in sustainable investing, made our decision clear.”
Deal Details & Benefits
The transaction, still subject to regulatory approvals and customary closing conditions, is expected to close during the second half of the year.
Following the completion, Parnassus’ partners will remain owners of significant part of the equity of the firm and manage day-to-day operations. Also, the Parnassus investment process will not change and the firm’s investment team will remain fully independent. Also, Allen and Todd Ahlsten — CIO and portfolio manager — will enter into long-term employment agreements under the deal.
The addition of Parnassus will increase Affiliated Managers’ ESG-focused assets under management (AUM) balance to nearly $80 billion, with AUM incorporating ESG factors into the investment process to roughly $600 billion.
Further, Affiliated Managers stated, “With more than 95% of its mutual fund AUM in strategies with a Morningstar Rating of 4 or 5 stars, and each of its equity funds maintaining top sustainability ratings, Parnassus intends to provide investors with attractive long-term, risk-adjusted returns by investing in high-quality businesses at reasonable prices.”
Affiliated Managers projects the deal to contribute $70 million to adjusted earnings before interest, taxes, depreciation and amortization as well as $1.30 to economic earnings per share for 2022.
Conclusion
At present, ESG investing is in vogue. The coronavirus pandemic has shifted investors’ interest toward those companies that perform well on ESG targets.
ESG investing is one of the fastest growing segments in the investment management industry. So far this year, ESG-focused funds have attracted huge investments across the globe.
Affiliated Managers’ other investments in sustainable investing fund managers include interests in Boston Common Partners and Inclusive Capital Partners. Backed by these and other similar investments, the company is expected to continue generating meaningful growth over time. Further, rising demand for equity and alternative strategies among institutional clients is expected to keep supporting its profitability.
So far this year, shares of Affiliated Managers have gained 64.1%, outperforming 27.5% growth recorded by the industry.
Currently, Affiliated Managers carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Companies Taking Similar Steps
Many finance companies have started to come ahead and participate in ESG investing over the past couple of years. This June, BlackRock (BLK - Free Report) announced a deal to acquire the Climate Change Scenario Model of Baringa Partners and integrate the same into its own Aladdin risk management system.
Likewise last month, JPMorgan (JPM - Free Report) inked a deal to acquire San Francisco-based start-up, OpenInvest, which provides ESG investment management products. Also, the company, — through the asset management division — announced a deal to acquire Campbell Global, LLC, a forest management and timberland investing company. Through these moves, the bank seeks to directly make its mark on the transition to a low-carbon economy and provide ESG-minded investment opportunities.
Moreover, in November 2020, Moody's (MCO - Free Report) acquired a minority stake in MioTech, as part of its efforts to offer innovative ESG and know your customer solutions to financial markets of China. Also, in 2019, it acquired a majority stake in VigeoEiris, a global leader in ESG research, data and assessments.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>