Dive Brief:
- KeyBanc Capital Markets, the corporate and investment banking arm of Cleveland-based KeyCorp, has agreed to acquire Atlantic-Pacific Capital, a private capital adviser for financial sponsors, Key said Tuesday.
- The purchase is set to bolster Key’s advisory and capital raising capabilities and enable the bank to offer more services to financial sponsors, Key said in the release.
- Terms of the deal weren’t disclosed. The transaction is expected to close in early 2027.
Dive Insight:
The acquisition of New York-based Atlantic-Pacific, founded in 1995, will add about 30 employees to $193 billion-asset Key.
The firm, which has a global presence, has handled about 180 capital-raising assignments totaling $123 billion for alternative asset managers, according to the release.
“This acquisition marks a significant step forward in our ability to serve financial sponsors with private capital solutions at the fund and individual asset level, while positioning Key to participate in the expanding market for the creation of continuation vehicles,” Randy Paine, head of KeyCorp's institutional bank, said in the release.
“Atlantic-Pacific Capital's established relationships, global LP distribution, and secondary advisory expertise complement our deep industry expertise and existing investment banking capabilities. We are thrilled to welcome the team to Key,” Paine said.
James Manley, Atlantic-Pacific Capital’s founder and chairman, said joining Key gives Atlantic-Pacific’s clients access to the scale and resources of a large corporate and investment bank.
“Sponsors today don't raise capital one way,” Raed Elkhatib, president and CEO of Atlantic-Pacific Capital, said in the release. “The same firm might be raising a fund, syndicating a direct deal and running a continuation vehicle at once, and they want one partner who can execute across all of it. Our investor relationships and track record across funds, directs and secondaries, combined with Key's platform and sponsor coverage, let us be that partner.”
The deal is likely a “very small transaction” that won’t have a visible impact on Key’s financials, but it’s consistent with other bolt-on capital markets deals Key has made recently, TD Cowen analyst Scott Siefers wrote in a Tuesday note.
In April, Key said it was acquiring Clearwater Corporate Finance, a U.K.-based middle-market investment banking advisory firm, giving Key an entrance into the western European market. That deal closed in August.
Key “is methodically building out its (investment banking) platform with niche boutiques that fill specific geographic or capability gaps, in both cases leveraging pre-existing relationships and low integration risk,” RBC Securities analyst Gerard Cassidy wrote in a Tuesday note.
Atlantic-Pacific brings Key incremental platform expansion as it targets $1 billion in annual investment banking revenue, he noted.
“The addition of a scaled global LP distribution network and secondary advisory capability is, in our view, a complement to KeyBanc Capital Markets’ existing middle-market M&A and capital markets franchise,” Cassidy wrote.
