The TCW Group has acquired Los Angeles-based Craton Equity Partners, a private equity firm that specialises in socially responsible investing.
Terms of the transaction were not disclosed.
Founded in 2006, emerging manager Craton Equity provides growth capital to venture-backed companies within the sustainability, resource efficiency and carbon-reducing technology sectors. The firm has USD241.5m in assets under management and typically invests in companies with low-capital requirement business models that generally operate independent of any tax credits and government subsidies.
“The acquisition of Craton Equity further expands our alternative asset management platform at a time when institutional investors are increasingly issuing mandates for socially responsible investing,” says Jess M Ravich, group managing director and head of alternative products at TCW. “TCW has always been a diversified asset manager, and alternative products continue to be an important part of the firm’s investment mix. We are very pleased to welcome Craton Equity to our platform and look forward to offering this socially-responsible investment strategy to our institutional clients.”
Craton Equity managing partners Bob MacDonald and Tom Soto will become managing directors at TCW/Craton. Craton Equity managing partner Kevin Wall will become a senior advisor, while David Asarnow, partner at Craton Equity, will become a senior vice president and director of investments at TCW/Craton. All of the former Craton Equity partners will be on the investment committee for TCW/Craton, where they will be joined by Ravich and David Wang, director of alternatives at TCW. All employees of TCW/Craton will be relocated to TCW’s Los Angeles office.
“The Craton Equity team is very pleased to now be a part of TCW’s alternative investments platform,” says Soto. “Becoming part of a large asset manager that is unequalled in its success gives us additional resources and puts us in an ideal position to help our limited partners participate in socially responsible investing. We look forward to this next chapter as we continue to focus on our investment mandate – obtaining superior returns for our partners while also creating long-term environmental and social benefits.”
