Private equity firm Lightyear Capital LLC has acquired a majority stake in retail lender Pathlight Capital LLC.
Pathlight, headquartered in Hingham, Massachusetts, provides secured, asset-based loans to consumer and retail businesses, used for growth, acquisitions, debt refinancing or restructurings. The lender also provides mezzanine financing.
Pathlight expects the Lightyear investment to help it expand into new industries. Pathlight's CEO Daniel Platt, who still owns a minority stake in the business, will continue to lead the company.
New York-based Lightyear focuses on investing in financial services companies. The firm has raised more than $2.5 billion of capital and makes control investments in North America-based middle-market businesses.
The firm's other investments include Wealth Enhancement Group, a financial planning business that it bought from Norwest Equity Partners earlier this year, and Cooper Gay Swett & Crawford Ltd., an insurance company. In 2014, the firm exited wealth manager Cetera Financial Group to RCS Capital Corp. NYSE: RCAP).
Dealmakers expect to see more M&A in financial services, according to Mergers & Acquisitions' Mid-Market Pulse, a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives.
Lightyear's Pathlight acquisition comes as retailers hobble to keep up with changing consumer demands and technological shifts, which are causing trouble for some. For more, see American Apparel's Bankruptcy Underscores Challenges for Retailers.