Pasadena Capital to Be Acquired by Phoenix Duff


Pasadena Capital Corp., the holding company for Pasadena-based investment manager Roger Engemann & Associates, agreed Monday to be bought by Phoenix Duff & Phelps, in the latest big consolidation move within the money management industry.

Hartford, Conn.-based Phoenix, which manages $33 billion in assets, will gain another $5.4 billion with Pasadena Capital, which manages primarily individual accounts and also has nearly $1 billion in its six mutual funds under the Pasadena name.

Phoenix agreed to pay $180 million in cash for Pasadena, with another $50 million to be paid if the firm meets certain revenue targets in the next three to five years, Pasadena founder Roger Engemann said. Engemann and other key employees have agreed to continue managing the business under long-term contracts, he said.

With his family, the 56-year-old Engemann--who started the company in 1969--owns 83% of Pasadena Capital. The rest is owned by employees.


Engemann put the firm up for sale a year ago, motivated by estate-related issues, he said. The decision also came at a time when many smaller mutual fund companies began opting to find bigger partners amid intensifying competition.

For Engemann and Pasadena, the deal will provide a major new sales outlet for the company’s investment products, which have focused largely on major U.S. blue-chip consumer-growth stocks. Phoenix’s parent is insurance giant Phoenix Home Life Mutual.

For Phoenix, the acquisition moves it further toward its goal of becoming “a full-service money management firm,” said Chief Executive Philip R. McLoughlin. Phoenix recently agreed to buy a major stake in San Francisco money manager GMG/Seneca Capital, which manages $3 billion.

The amiable, white-haired Engemann built his business using the simple concept of buying and holding high-quality consumer stocks such as Walt Disney and Gillette. He has often called himself “the luckiest guy alive.”