AMG Buys Pantheon

Affiliated Managers Group Inc., the listed, Boston-based asset manager, and Russell Investments, a Northwestern Mutual Life Insurance subsidiary, have agreed to a deal in which AMG will acquire Pantheon Ventures, Russell’s London-based private equity firm, for $775 million in cash.

Pantheon’s management, including London-based managing partner Alastair Bruce, will also own a stake in the venture and will continue to maintain a role in the PE firm’s operation.

The strategic play is the biggest in AMG’s history. The asset manager has acquired in recent months: UK-based fund manager Artemis Investment Management in February; US-fund manager Aston Asset Management in December 2009 and Hong Kong-based Value Partners Group in November 2009.

Pantheon’s clientele is primarily spread throughout Asia, Europe and Australia; 75% of its clients are not US-based. Executives with AMG said during a conference call discussing the deal that the asset manager could make additional strategic plays to support its diversification.

Pantheon was owned by its management and founders until 2004, at which point it was sold to Northwestern’s Russell.

As private equity makes forays increasingly into the financial services space via bank acquisitions, some firms have also expanded their reach to the asset management space. This marks the asset manager’s first buy into private equity, for AMG.

Last year, Invesco Ltd. and WL Ross & Co. prepared a $1 billion fund to invest in the federal government’s Public-Private Investment Program; the investors were joined by other investors firms to make financial services plays.

Earlier this month, Lightyear Capital completed its acquisition of three broker-dealers from ING Advisors Network. The PE firm bought Financial Network Investment Corporation, Multi-Financial Securities Corporation and PrimeVest Financial Services Inc.

Turbulence within the asset management field has allowed private equity firms to increasingly pursue targets within the industry and roll-up plays are happening more often. TCW Group money manager Jeffrey Gundlach launched DoubleLine asset management with the help of OakTree Capital Management following his ouster. Now, TCW faces a situation in which it needs to merge with Metropolitan West Asset Management thanks to a staff purge to DoubleLine. Terms of that deal are still being completed.

Also, Focus Financial Partners, a New York-based roll-up of wealth managers, recently accepted a cash infusion from Polaris Venture Partners and Summit Partners and also acquired Joel Isaacson & Co., a money manager.