Virtus Investment Partners, which operates a multi-manager asset management business, has entered into a definitive agreement to acquire a majority interest in Keystone National Group, an investment manager specializing in asset-centric private credit. The transaction expands Virtus’ offerings into private markets with the addition of an asset-backed lending capability.
“Partnering with Keystone allows us to offer strategies of an innovative asset-centric private credit manager that has delivered attractive, uncorrelated returns to meet the needs of clients who are increasingly looking for alternative sources of income as well as to diversify their private credit exposure beyond direct lending,” George R. Aylward, president and CEO of Virtus, said. “John Earl and Brandon Nielson, Keystone’s co-founders, and their team have built a high quality, client-focused business and we welcome them to our family of investment managers.”
Under the agreement, Virtus would purchase a majority interest in Keystone for consideration of $200 million at closing and up to an additional $170 million of deferred consideration, including earnout payments subject to the achievement of future revenue targets. Virtus expects to finance the transaction using existing balance sheet resources.
Keystone’s management team will retain meaningful equity in Keystone and the managing partners will enter into long-term employment agreements. As a Virtus investment manager, Keystone will retain autonomy over its investment process and day-to-day activities, as well as preserve its culture and brand identity.
“We are excited to be partnering with Virtus, who we view as an ideal strategic partner to support our next stage of growth and evolution for the firm. We are proud of our consistent track record over the last two decades as an early pioneer in asset-backed private credit and grateful for the support of our investors, team and partners who have all contributed to our shared success. We look forward to continuing to deliver outstanding service for our clients as part of the Virtus platform,” John Earl, co-founder and managing partner of Keystone, said. “Virtus’ extensive distribution footprint positions us to further capitalize on the increasing number of investment opportunities that we continue to see in our differentiated asset-backed credit space.”
The transaction is expected to close in Q1/26, subject to customary closing conditions, including approval by the KPIF fund board and fund shareholders, and is expected to be accretive to earnings in 2026.
RBC Capital Markets acted as financial advisor and Goodwin Procter was the legal advisor to Virtus on the transaction. BofA Securities acted as financial advisor and Willkie Farr & Gallagher was the legal advisor to Keystone National Group.
