Buyout funds approach Santander and Intesa over Allfunds deal, say sources: Reuters

Buyout firms have approached Santander Asset Management (SASS.SN) and Intesa Sanpaolo (ISP.MI) over a possible takeover of the Allfunds Bank mutual fund platform, sources told Reuters.

U.S. buyout fund Bain Capital and Europe’s Advent are planning to make a joint bid for the business, which could be worth up to 2 billion euros ($2.2 billion), the sources said.

Cinven [CINV.UL], Permira, BC Partners and Hellman & Friedman have also discussed Allfunds with its Spanish and Italian owners, prompting a strategic review of the platform.

Santander Asset Management and Intesa, which own 50 percent each of the Madrid-based firm, have decided to sell their shares and are seeking advice from large investment banks to begin an auction before the end of the year, the sources said.

Mid-sized asset managers appeal to private equity investors as they generate stable returns and offer scope for growth over a three to five year period.

Santander Asset Management, Intesa Sanpaolo, Cinven, Advent, BC Partners and Hellman & Friedman all declined to comment, while Bain Capital and Permira were not immediately available.

Banco Santander (SAN.MC) has a 50 percent stake in Santander Asset Management, while U.S. buyout firms Warburg Pincus [WP.UL] and General Atlantic control the remainder.

Santander Asset Management is selecting an adviser, while Intesa is working with U.S. bank Morgan Stanley, they said.

Established in 2000 to provide access to so-called open architecture investment funds market, Allfunds has more than 200 billion euros of assets under management.

It offers more than 47,000 funds and has an extensive network of more than 503 clients including commercial and private banks, fund managers and insurers.

The sources said it generates earnings before interest, taxes, depreciation, and amortization (EBITDA) of about 125 million euros and could be valued at close to 16 times this.

Earlier this year analysts pointed to the acquisition by London-based asset manager Henderson Group (HGGH.L) of U.S. rival Janus Capital as a catalyst for further consolidation as companies need to gain global scale, streamline operations and diversify their portfolios.

UniCredit (CRDI.MI) wants to find a new owner for its fund management arm Pioneer by the end of the year and has recently received binding bids valuing the unit at more than 3 billion euros.

Meanwhile, Bain and Advent have often teamed up over the years to secure joint control of several European financial services and payment firms such as Worldpay (WPG.L) and Nets (NETS.CO), which were both recently listed on European stock markets, as well as Italy’s Istituto Centrale delle Banche Popolari (ICBPI).