Pinnacle Investment Management has announced it will acquire a strategic stake in a US and UK manager for $142 million.

These are a 22.5 percent stake in US-based private markets company VSS and a 25 percent equity stake in UK-based multi-asset manager Pacific Asset Management (PAM). The VSS holding is for US$60.5 million ($92.6 million) and £25.7 million ($49.9 million) for the UK asset.

The firm is also raising $400 million through a fully underwritten placement of Pinnacle shares to institutional and veteran investors to fund the two investments, lay out new strategies for existing affiliates and support investment in new growth initiatives.

Pinnacle said the new partnerships will enhance the firm's diversification into private equity and international markets, while providing additional scale.

“VSS and PAM underscore Pinnacle's focus on international acquisitions with significant growth potential where Pinnacle expects to add value to accelerate growth. Pinnacle also continues to support the growth of current affiliates, including through increased investment in domestic and international distribution channels.

"Pinnacle continues to report strong momentum in FY25, with continued growth in private markets and other alternative strategies, historic public market equity fundraising difficulties easing and significant international inflows following expanded capability building of Pinnacle for international distribution."

New affiliates

Founded in 1981, VSS specializes in structured equity investments that provide capital to finance growth, strategic acquisitions and buyouts of lower middle market companies and management teams.

The $60.5 million is split between $50.8 million for Pinnacle's share of the asset management business and $9.7 million for Pinnacle's share of the VSS fund investments. This will be Pinnacle's second North American-based affiliate, as it already owns a stake in Canadian small-cap equity manager Langdon Equity Partners.

Meanwhile, Pacific Asset Management was founded in 2006. and is backed by Pacific Investments Group as well as UK distributor of Pinnacle-linked funds Coolabah Capital Investments.

Pacific Asset Management is Pinnacle's third UK affiliate alongside Aikya Investment Management and Life Cycle Investment Partners.

“Together with its own technology platform for multi-asset portfolio solutions, PAM has a broad distribution footprint across the UK, including in the wealth market, which is expected to be a strong complement to Pinnacle's existing capabilities. It has a successful history of supporting wholly-owned and minority-owned investment boutiques and providing third-party distribution services.

"PAM is the UK distributor of Pinnacle Affiliate, Coolabah Capital Investments, and over time it is anticipated that there will be significant opportunities for collaboration in the areas of distribution, infrastructure and technology, which will benefit both the businesses and other Pinnacle affiliates .”

Commenting on the deal, Pinnacle Managing Director Ian Macoun said: “We have made great progress in exporting our unique multi-partner model globally. These transactions not only accelerate and enhance our international growth ambitions, but also provide further diversification of the asset class and support the further growth of our platform.

“Both VSS Capital and Pacific Asset Management have client-centric cultures and have outstanding results when it comes to growth, performance and meeting the needs of their clients. Having worked with the teams for many months, we have great confidence in each firm's ability to deliver sustained excellence going forward.”