Print | Share | Reprint

AXA Private Equity funds-of-funds raise $8B

by Jonathan Braude | Published June 18, 2012 at 10:16 AM

Paris-based AXA Private Equity on Monday, June 18, announced it had raised a total of $8 billion for its fund-of-funds business, including $7.1 billion for its Secondary Fund V and Early Secondary V fund and about $900 million for its primary fund-of-funds.

The new secondaries fund has attracted commitments from institutional investors from North America, the Middle East and Asia, primarily pension funds, government agencies and family offices. It has also secured a "substantial investment" from the AXA Group, the private equity firm's French insurance parent, according to a source close to the situation.

"I am pleased to see further co-investments and commitments, particularly new funds from the AXA Group," said AXA Private Equity CEO Dominique Senequier, in a statement, adding the success of the fundraising signaled the confidence of investors in the firm's ability to invest responsibly.

Riding a wave of regulation-driven divestments from banks, AXA Private Equity and other secondary portfolio specialists expect to see further growth in secondary investment opportunities over the next two years. Regulatory changes such as the European Union's new Solvency II requirements, which demands insurance companies set aside regulatory capital of 49% for every euro invested, may force insurers to join their banking brethren in raising more capital. The private equity industry is fighting proposals that could force pension funds to take the same path. But while the regulatory upheaval is likely to prove an obstacle to fund-raising for both primary and secondary funds, established secondaries players such as AXA also stand to gain enormously from the institutions' forced withdrawal from the market.

AXA Private Equity, which has been raising secondaries funds of funds since 1999, says it now manages about $19 billion across 800 funds in the portfolio. A source said it has been raising the latest fund for at least two years and has already committed about 40% of Fund V in several large transactions in the U.S. and Europe.

Among its biggest deals were the June 2011 acquisition of a $1.7 billion portfolio of limited partnership interests in private equity buyout funds and a portfolio of direct stakes in companies from Citigroup Inc., closely followed by a $740 million portfolio from Barclays plc. Then in August 2011, the firm acquired a majority stake in a private equity portfolio from Hamburg-based HSH Nordbank AG, valued at €620 million ($789 million).

AXA Private Equity's secondaries fund-raising success comes as the firm continues to negotiate its own possible buyout from the AXA group. That process, announced in September last year, is seen as wholly separate from the fund-raising work, which in any case predates plans for a separation from the insurance group.

Sources say the divestment process continues, although it is slow and extremely complicated, given the scale and diversity of AXA Private Equity's businesses. Together they have assets under management of $28 billion. It is thought unlikely at the moment that the AXA Private Equity team could consider buying the entire business on its own, without an alternative backer to take the place of AXA Group. At one point last year, the sale was reportedly seen as a two-horse race between Canadian private equity group Onex Corp. and an alliance of Caisse de Dépôt et Placement du Québec, Canada's largest pension fund manager, and the Government of Singapore Investment Corp. More recently reports suggested that the Caisse de Dépôt alliance was still in talks but had "taken a step back" over a number of unspecified stumbling blocks.

Share:

Private Equity

AXA Private Equity funds-of-funds raise $8B

Free preview

Meet the journalists

Jonathan Braude

Senior Writer: Global News

Movers & Shakers

Video

Fewer deals despite discount debt

Sectors