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PGIM to Acquire Majority Interest in Deerpath Capital

May 03, 2023, 08:03 AM
Filed Under: Industry News

PGIM, the $1.2 trillion global investment management business of Prudential Financial, Inc., has signed a definitive agreement to acquire a majority interest in Deerpath Capital Management, LP and its associated affiliates. Deerpath Capital is a U.S. private credit and direct lending manager focused primarily on financing private equity sponsor-backed companies in the lower middle market. Deerpath Capital currently has more than $5 billion in assets under management.

Deerpath Capital will retain its investment and operational independence as part of PGIM Private Capital (PPC) and will receive significant support from PGIM as part of the strategic partnership. Deerpath Capital co-founders James Kirby and Tas Hasan will continue to manage the business as chief executive officer and chief operating officer.

“This partnership with Deerpath Capital reflects our ambition to further grow our alternatives platform,” said David Hunt, president and CEO of PGIM. “It complements PGIM Private Capital’s existing direct lending capabilities by adding expertise in the lower middle market-sponsored space, further enhancing the direct origination platform of PGIM Private Capital’s core middle market-focused direct lending platform.”

Bringing together the benefits of global scale and deep asset-class expertise across public and private markets, PGIM seeds, develops and manages a broad range of liquid and alternative strategies for some of the largest institutional investors globally. The partnership with Deerpath Capital enhances PGIM’s existing global alternatives offering, which is currently $237 billion in assets under management in strategies across real estate, private credit and other alternatives.

“We are thrilled to welcome the Deerpath team to PGIM Private Capital,” said Matt Douglass, president and CEO of PGIM Private Capital. “We originate billions of dollars of loans every year, and the combination of Deerpath’s lower middle market capability and PPC’s focus on the core middle market will help materially accelerate the growth of both platforms going forward.”

The Deerpath team will work closely with PGIM Private Capital’s Head of Alternatives Jeff Dickson, who oversees direct lending alongside PGIM Private Capital’s corporate mezzanine, energy mezzanine and sustainable power investment platforms. Dickson will collaborate with Deerpath co-founders Kirby and Hasan to maximize the potential between the two companies’ complementary deal sourcing capabilities.

“PGIM Private Capital has been a global leader in debt investing for more than 50 years and is an ideal strategic partner for Deerpath. Their deep understanding of the asset management business, global footprint and distribution network will help Deerpath grow our direct lending platform, while allowing us to preserve our investment and operational independence,” said Kirby, co-founder, president and CEO of Deerpath Capital Management, LP.

Since its inception in 2007, Deerpath Capital has deployed over $8.8 billion of invested capital in more than 850 investments, across a broad range of industries and transaction types. Deerpath Capital has direct origination and execution capabilities throughout the United States with origination offices in New York, Boston, Chicago, Fort Lauderdale and Los Angeles. In addition, it has offices in London, Seoul and Australia to support international investors. Deerpath’s more than 80 employees bring deep, specialized expertise in lower middle market direct lending.

Sera Global served as exclusive financial advisor to Deerpath Capital, and Purrington Moody Weil LLP served as Deerpath’s legal counsel. BofA Securities served as exclusive financial advisor to Prudential, and Debevoise & Plimpton LLP served as legal counsel.

The closing of the transaction is subject to the receipt of all regulatory approvals.

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