PE Firm Kelso & Company Takes Minority Stake in $80B UHNW-Focused RIA Pathstone

Kelso & Company has acquired a minority interest in Lovell Minnick Partners (LMP)-backed Pathstone; a registered investment advisor (RIA) with $80 billion in assets under management and under advisement that serves ultra-high net worth individuals. 

Financial terms of the deal, which is set to close in the second quarter of 2023, were not made available. 

LMP, who first invested in Pathstone in 2019, will continue its investment and plans to deploy additional capital in the business. 

“Their (Kelso) partnership will provide capital to further support our culture of growth and innovation, as well as resources and expertise to enable us to accelerate our strategic initiatives and deliver upon the multi-generational promise we make to our clients and employees alike,” said Matt Fleissig, CEO of Pathstone. 

Englewood, NJ-based Pathstone has picked up its pace in RIA and RIA-adjacent business acquisitions. Last year, the firm acquired two RIAs with a combined $6.5 billion in assets, a $1.9 billion direct indexing firm and a $35 billion trust company. Last week, it acquired $1.5 billion RIA Rex Capital Advisors. 

Since 1980, Kelso has invested approximately $19 billion over 135 transactions. Last October, the New York-based firm took a minority stake in $12 billion RIA Savant Wealth Management. 

Ardea Partners LP served as the exclusive financial advisor, and Alston & Bird LLP served as the legal advisor to Pathstone. Kirkland & Ellis LLP and Republic Capital Group advised LMP. William Blair & Co. provided financial advice, and Debevoise & Plimpton LLP served as the legal advisor to Kelso.