Adds $4.2 Billion in High-Net-Worth Assets

Affiliated Managers Group, Inc. has reached a definitive agreement to acquire 60% ownership in Welch & Forbes, Inc. and the Welch & Forbes Partnership.Welch & Forbes, a Boston-based investment management and advisory firm, currently has over $4.2 billion in assets under management, primarily in the high-net-worth market.

'[Welch & Forbes'] substantial growth in recent years is the result of excellent investment performance and superior client service,' said Sean Healy, president and chief operating officer of AMG. 'From AMG's perspective, this is an attractive investment in a very high quality firm with great management, providing added diversification to AMG's earnings through increased participation in the growing high net worth and trust client channels.'

AMG typically invests in mid-sized companies, with assets between $500 million and $15 billion, the 'sweet spot on the growth curve,' according to Bill Nutt, AMG's chairman and CEO. He elaborated that such firms are expected to double or triple in size.

While AMG is not disclosing the price of its transaction, chief financial officer Darrell Crate, did say, 'It is at the upper end range of what we have paid for investments.'

Nutt insisted that Welch & Forbes will remain autonomous and is not expected to cut staff as a result of the acquisition. All senior employees will sign long-term employment agreements and retain their investments in the firm. In addition, 13 employees will be given a stake in the company, broadening the base of employee-owners.

While Welch & Forbes does not currently operate any mutual funds, the firm will have access to AMG's resources and has been invited to create a product for AMG's fund family. However, Nutt emphasized that the decision to move into the fund market remains with Welch & Forbes.

Boston-based AMG remains on the lookout for additional investment opportunities. Crate explained that the firm currently has $350 million of additional capacity, with $140 million in excess cash. While AMG has clearly been attracted to the high-net-worth channel it does not favor a particular style or channel, Nutt said.

'When we're looking and targeting firms, we're looking for the highest quality mid-sized firms,' added Crate. 'They're evenly distributed among all sorts of styles.'

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