PGIM has agreed to acquire the remaining 25% stake in Deerpath Capital, taking full ownership of the US private credit manager as it seeks to broaden its direct lending platform.
The transaction, which remains subject to regulatory approval, follows PGIM’s acquisition of a 75% interest in Deerpath Capital announced in May 2023.
In a statement, PGIM said full ownership would strengthen its direct lending capabilities by combining Deerpath’s expertise in the lower middle market with its existing middle market and large-cap lending business.
The combined platform will manage $16bn (€13.8bn) in assets under management across a team of 55 investment professionals, according to the firms.
Matt Harvey, global head of middle market direct lending at PGIM, said: “As direct lenders have scaled, many have moved into the large cap segment. We continue to believe the traditional middle market remains an attractive and important segment for borrowers and investors.”
He added: “By moving to full ownership of Deerpath Capital, we are creating a more coordinated and scaled direct lending platform while preserving the investment discipline that has underpinned Deerpath Capital’s success.”
PGIM said the combined business would continue to support both private equity-sponsored and non-sponsored companies as they grow, while strengthening sponsor coverage and providing more tailored lending solutions across different borrower segments.
Deerpath Capital chief executive officer James Kirby said the transaction marked “the next chapter” for the firm as part of PGIM Credit, adding that the businesses had developed a strong working relationship since PGIM’s initial investment.
Following completion, Kirby and Tas Hasan will continue to lead Deerpath’s investment process and investment committee governance while also taking on leadership roles within PGIM Credit.
PGIM said the transaction would not change Deerpath’s investment team, underwriting approach or investment process.
