Axa Private Equity goes shopping in north Germany

AXA Private Equity has bought a controlling stake in a private equity portfolio from Germany’s HSH Nordbank, valued at €620m – part of a trend of banks selling secondaries that Axa expects to provide up to $50bn to market buyers.

The Hamburg-headquartered bank said the sale to Axa, and sales to Switzerland’s LGT Capital Partners, for an indisclosed sum was part of “disposing of non-strategic portfolios”.

The sale involves shares from 47 limited partnerships in European private equity buyout funds.

HSH noted in the context of the disposal process, four funds had already been sold for about €47m to two international investors at the start of August.

Axa Private Equity said the deal made it a world leader in secondary funds of funds, capping a series of acquisitions totaling more than $6bn over two years.

The portfolio acquired by Axa Private Equity consists of 18 different limited partnerships focused on leading European mid- and large cap buyout funds, representing €478m in original commitments.

Vincent Gombault (pictured), managing director funds of funds, at AXA Private Equity, said: “The transaction is the culmination of a long-term relationship with HSH Nordbank AG. These assets are excellently managed, offering real potential in terms of value creation for our investors, and providing a unique solution for HSH Nordbank AG.”

This deal is AXA Private Equity’s third recent major secondary funds of funds transaction. In June it bought a $1.7bn portfolio of assets from Citigroup and a $740m private equity portfolio from Barclays.

Gombault said he expected the secondary market to perform well over the coming two years as banks look to offload between $40bn and $50bn of private equity portfolios, pension funds follow on their heels, and pricing is “more acceptable”.

Gombault said pensions’ portfolios are not distressed, “but very often pension funds have very small teams and it is difficult to expect them to manage around 200 GP relationships. Some will look to rationalise their portfolios accordingly.”


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