Key Takeaways
- • The Private Equity Stakeholder Project (PESP) published "American Securities Risk Assessment," evaluating risks faced by institutional investors in American Securities' investment funds.
- • American Securities, founded as a family office in 1947 and opened its private equity fund to external investors in 1994, reports $27 billion in assets under management as of 2024 across 49 countries.
- • The report flags four risk areas: strategy and execution, headline, regulatory and legal, and ESG risks tied to privatization of public services.
- • Portfolio companies ViaPath and Amentum are cited for reputational risk, with ViaPath criticized over fees for family communication with incarcerated relatives.
- • A 2019 antitrust settlement in which American Securities paid $13 million to resolve price-fixing allegations at General Chemical is highlighted as a legal risk example.
Summary
The Private Equity Stakeholder Project (PESP) has released "American Securities Risk Assessment," a report intended to help pension funds and other institutional investors evaluate the risks associated with American Securities' investment funds against their financial and ethical standards.
According to the report, American Securities was founded as a family office in 1947 and expanded its private equity fund to external investors in 1994. CEO Michael Fisch leads the firm, which reports $27 billion in assets under management as of 2024. The firm operates in 49 countries, and its portfolio companies collectively employ around 149,000 people.
The report identifies four key risk categories: strategy and execution risks, headline risks, regulatory and legal risks, and ESG risks tied to the privatization of public services. It notes that several American Securities investments have faced bankruptcy or financial distress in recent years, raising concerns about the firm's strategies. Reputational risk is highlighted through portfolio companies ViaPath and Amentum. ViaPath has faced criticism for practices including exorbitant fees for family communication with incarcerated relatives, and the report cites the Federal Communications Commission's recent cap on prison phone and video call rates as a regulatory development affecting such investments.
On regulatory and legal risk, the report points to a 2019 antitrust settlement in which American Securities paid $13 million to resolve price-fixing allegations at General Chemical during its ownership period.
The report also examines broader stakeholder impacts, including on patients needing critical care, incarcerated individuals seeking family connections, and students affected by the education crisis. PESP concludes that institutional investors should assess whether American Securities' strategies align with their risk tolerance and ethical principles. The full report is available for download from PESP.
According to the report, American Securities was founded as a family office in 1947 and expanded its private equity fund to external investors in 1994. CEO Michael Fisch leads the firm, which reports $27 billion in assets under management as of 2024. The firm operates in 49 countries, and its portfolio companies collectively employ around 149,000 people.
The report identifies four key risk categories: strategy and execution risks, headline risks, regulatory and legal risks, and ESG risks tied to the privatization of public services. It notes that several American Securities investments have faced bankruptcy or financial distress in recent years, raising concerns about the firm's strategies. Reputational risk is highlighted through portfolio companies ViaPath and Amentum. ViaPath has faced criticism for practices including exorbitant fees for family communication with incarcerated relatives, and the report cites the Federal Communications Commission's recent cap on prison phone and video call rates as a regulatory development affecting such investments.
On regulatory and legal risk, the report points to a 2019 antitrust settlement in which American Securities paid $13 million to resolve price-fixing allegations at General Chemical during its ownership period.
The report also examines broader stakeholder impacts, including on patients needing critical care, incarcerated individuals seeking family connections, and students affected by the education crisis. PESP concludes that institutional investors should assess whether American Securities' strategies align with their risk tolerance and ethical principles. The full report is available for download from PESP.
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