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Rating:An AMG Boutique Buys Its Freedom Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, October 8, 2012

An AMG Boutique Buys Its Freedom

Reported by Tommy Fernandez

You can sell an investment boutique's fund, but you can't take away its freedom.

Essex Investment Management Company has, effective Oct. 2, bought back the 51 percent stake owned by Affiliated Managers Group, Inc. to become 100-percent employee-owned.

"This is good for the shareholders of our fund. It is good for our clients and it's good for the employees," says Gregory Goostray, vice president for sales and marketing at Essex.

MFWire could not immediately reach an AMG spokesman for comment on the divestment.

Essex serves as the sub-advisor for the Essex Small/Micro Cap Growth Fund, which is distributed under the AMG umbrella. Essex also acquired 100 percent ownership of the fund, according to a filing with the U.S. Securities and Exchange Commission but Goostray says that the fund will continue to be part of AMG's offerings.

"The fund hasn't changed at all," he says. "We are still 100-percent sub-advisor to the fund. That part of the Essex-AMG story will not change."

AMG had originally bought 68-percent ownership of Essex in January, 1998. The AMG subsidiary Managers Distributors, Inc., had distributed the Essex fund. OVer the years, AMG's ownership had diluted to 51 percent, according to Goostray.

It's common AMG practice to at least partially own shares in the boutiques which sub-advise its funds. The acquirer currently has at least 25 affiliates. 

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