(Bloomberg) -- A firm run by former Barclays Plc Chief Executive Officer Bob Diamond is taking an equity stake in middle-market investment bank Cascadia Capital as the advisory business looks to expand.

An investment fund tied to Diamond’s New York-based Atlas Merchant Capital will provide Seattle-based Cascadia with a “strategic growth equity investment,” the companies said in a joint statement Wednesday. Terms weren’t disclosed.

“We like to find investments where we can really add to the growth agenda,” Diamond said in an interview. “There are so many ways we can help.”

The agreement arrives as banks venture deeper into financial services targeted at middle-market companies via acquisitions. Huntington Bancshares Inc. acquired advisory firm Capstone Partners earlier this year, while Toronto-Dominion Bank agreed to buy US brokerage Cowen Inc. to increase its reach into capital markets.

“Over the years we’ve been approached by large institutions in Japan, Europe, the United States and Canada about being purchased,” Cascadia CEO Michael Butler said in an interview. “We felt that the right thing for our clients, our partners and our employees was to remain independent. But at the same time, we realized we needed more gas in the tank in terms of capital.”

Bulking up the private equity practice is a priority, Butler said. The investment bank will also put the equity infusion toward expanding its dealmaking arm more broadly, a move that will require outside hires, he said.

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