AXA Considers Sale of PE Unit

French insurer AXA is considering a sale of its private equity unit, Reuters reported Wednesday. The unit has roughly 20 billion euros ($27.3 billion) under management. A sale would likely be a response to tougher capital requirement rules aimed at bolstering the financial industry, Reuters wrote. A review of the PE unit is in a “preliminary stage,” Reuters said.

(Reuters) – French insurer AXA confirmed on Wednesday that it was exploring the possible sale of its private equity unit, adding that there was no guarantee that the process would lead to a transaction.

AXA said the “strategic review” of the unit was in a “preliminary stage.” Europe’s No. 2 insurer said it still sees private equity as an attractive investment class for its assets.

Reuters and other media first reported last week that AXA was considering a sale of the private equity unit, which has 20 billion euros ($27.3 billion) under management.

One source told Reuters the unit could be worth as much as $1.5 billion, while others said that it was likely to fetch substantially less.

Analysts have said a sale of the private equity unit would likely be a response to the tougher capital requirements under the Solvency II rules aimed at bolstering the industry’s financial strength.

AXA shares were little changed in early trading, slightly outperforming the European sector , which was 0.8 percent lower. ($1 = 0.733 Euros) (Reporting By Christian Plumb; Editing by Matthias Blamont)