“Parish is a great way for us to enhance our capabilities at the small-end of the market,” Brem said in an interview with Buyouts. Brem also cited Parish’s European expertise as a reason to buy the fiirm.
As part of the deal, two of Parish Capital’s three founders, Charles Merritt and James Mason, will help with the transition but may not have active roles after that, Brem said. The firm’s third founder, Wendell McCain, left Parish Capital in 2010 to start a new firm,
One Parish investor, who was not authorized to speak publicly about the sale, said, “We felt that they were smart guys, but they’ve had a ton of turnover, and when you have that kind of turnover, you start to feel that it’s not what you bought into.”
StepStone, which was spun out of PCG several years ago, is both an advisory firm and an asset manager. Its advisory clients—mainly pension funds, sovereign wealth funds and foundations—have more than $40 billion in private equity assets, while its asset management business would oversee about $10 billion if the Parish acquisition goes through, as expected.
StepStone has been on the acquisition trail of late. In 2010, the firm purchased
Advisory clients of StepStone include the
For its part, Parish Capital’s investors have included the
A key question for StepStone is what it plans to do with its Parish Capital acquisition. Parish Capital has been known since its inception as an emerging funds-of-funds manager. According to Brem, however, StepStone “doesn’t have any plans to start fundraising for a successor, co-mingled, fund-of-funds,” and said StepStone plans to focus more on customized separate accounts.
Moreover, the departure of Merritt and Mason could activate “key man” provisions, potentially forcing StepStone to get reaffirmations from Parish’s current investors about their intentions to remain committed.
News that Parish had been seeking a buyer had been lingering for several months, ever since Fortune reported in June that the firm hired an investment bank. According to one source, “this deal was not altogether unexpected.”
Calls made to Parish Capital were not returned.
UPDATE: This story has been updated throughout from a version originally posted on November 30, 2011, to include comments from Monte Brem, StepStone’s chief executive.