AMG Buys Fund Of Private Equity Funds

Feb 10 2010 | 11:11am ET

Affiliated Managers Group, which owns stakes in several hedge funds and other asset management companies, is adding a fund of private equity funds firm to its stable.

The Beverly, Mass.-based firm is buying Russell Investment’s Pantheon Ventures. Pantheon currently manages some $22 billion in regional funds of funds in the U.S., Europe and Asia. The firm also manages a global secondary fund of funds, a global infrastructure fund of funds and a separate accounts program.

Pantheon boasts 141 employees spread across offices in New York, San Francisco, London and Hong Kong. As part of the agreement, 21 of Pantheon’s management partners have accepted long-term employment contracts.

“Private equity is a core element of institutional investors' overall asset allocation, and we believe that the asset class will continue to produce superior returns and attract new clients worldwide,” AMG CEO Sean Healey said. “We view the fund-of-funds structure as an especially attractive way to participate in this important asset class, given the stability and consistency of its revenue stream, as well as the scalability of its investment platform.”

AMG will pay $775 million in cash for Pantheon, as well as further payments over the next five years dependent on the unit’s growth. The deal is expected to close in the second quarter.

AMG owns stakes in four hedge fund firms: AQR Capital Management, BlueMountain Capital Management, ValueAct Capital and Value Partners.

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