(Reuters) -Clearlake Capital Group said on Wednesday it will buy investment manager Pathway Capital Management, as the buyout firm looks to expand its presence in the red-hot private markets segment.
The deal, whose terms were not disclosed, will help more than double Clearlake's assets under management to $185 billion and accelerate its growth in private credit, secondaries, and co-investments.
It will also expand Clearlake's presence among institutional and wealth clients, which alternative asset managers have been increasingly targeting as investors in private markets.
As higher interest rates crimped dealmaking in recent years, buyout firms have sought to diversify beyond the traditional private equity strategy and expanded into alternative investments such as private credit.
Founded in 1991, Irvine, California-based Pathway manages over $95 billion in assets across private equity, private credit, and infrastructure mandates.
The Wall Street Journal on Wednesday reported, citing people familiar with the matter, that Clearlake will pay $1 billion for the investment manager.
The deal is expected to close in the first quarter of 2026. Upon closing, Clearlake will have nearly 500 employees.
Pathway will retain its brand and operate independently as Clearlake's investment solutions business.
James Chambliss, Richard Mazer, and Alex Casbolt will lead the Pathway team.
Evercore and BofA Securities served as financial advisers to Clearlake, while UBS Investment Bank advised Pathway.
(Reporting by Pritam Biswas and Arasu Kannagi Basil in Bengaluru; Editing by Shailesh Kuber)
