American Securities Risk Assessment
Unveiling Key Risks for Institutional Investors
July 31, 2024
The Private Equity Stakeholder Project presents its latest report, “American Securities Risk Assessment,” offering a detailed evaluation of the risks faced by institutional investors involved with American Securities’ investment funds. This report is an essential resource for pension funds and other institutional investors aiming to make well-informed decisions that align with their financial and ethical standards.
About American Securities
Founded as a family office in 1947 and expanding its private equity fund to external investors in 1994, American Securities has flourished under CEO Michael Fisch’s leadership. With $27 billion in assets under management as of 2024, the firm operates in 49 countries, investing in companies that collectively employ around 149,000 people.
Key Risks Identified
The report highlights critical areas of risk for institutional investors, including:
- Strategy and Execution Risks
- Headline Risks
- Regulatory and Legal Risks
- ESG Risks tied to Privatization of Public Services
In recent years, several American Securities investments have faced bankruptcy or financial distress, raising concerns about the firm’s investment strategies. Additionally, reputational risks have emerged from companies owned by American Securities, such as ViaPath and Amentum. ViaPath, for example, has faced criticism for predatory practices, including exorbitant fees for family communication with incarcerated relatives. Regulatory changes, such as the Federal Communications Commission’s recent cap on prison phone and video call rates, further impact these investments.
One notable instance of regulatory and legal risk is the 2019 antitrust settlement where American Securities paid $13 million to resolve price-fixing allegations at General Chemical during its ownership.
Impact on Stakeholders
The report also addresses the broader impacts of American Securities’ investments on stakeholders, including patients in need of critical care, incarcerated individuals seeking family connections, and students affected by the education crisis. Given these considerations, it is imperative for institutional investors to assess whether American Securities’ strategies align with their risk tolerance and ethical principles.
Access the Full Report
For comprehensive insights and detailed analysis, download the full “American Securities Risk Assessment” report below.
