Nevada Public Employees' Retirement System is severing ties with Clearlake Capital Partners after the firm's planned acquisition of Pathway Capital Management raised conflict of interest concerns. The $74.9 billion pension system will divest all Clearlake-managed investments from its private equity portfolio, which Pathway has overseen since 1992.

Clearlake accounts for approximately $207 million in exposure across multiple vehicles within Nevada PERS's portfolio. The pension determined that divesting from Clearlake represents the only way to eliminate both current and potential future conflicts, according to materials prepared for its March board meeting. Nevada PERS plans to complete the divestiture before Clearlake's acquisition of Pathway closes.

The pension's private equity portfolio totaled $5.3 billion as of December, exceeding its 5 percent target allocation. Pathway manages $95 billion in assets, with Nevada PERS representing roughly 5.4 percent of that figure. Clearlake is currently raising its eighth flagship fund with a $15 billion target, having closed its predecessor on $14.1 billion.