Groupama Mulls Sale of PE Arm

French insurer Groupama is mulling a sale of its private equity arm, Reuters reported, citing the French online newspaper Agefi. Groupama private equity manages 1.8 billion euros ($2.3 billion)in 16 funds, Reuters wrote.

(Reuters) – French mutual insurer Groupama is considering a sale of its private equity business as part of an ongoing programme of asset disposals aimed at strengthening its balance sheet, French on-line newspaper Agefi reported.

Groupama private equity manages 1.8 billion euros ($2.3 billion)in 16 funds, the investment-focused publication said in its Friday edition.

There are three teams in the unit: one that does leveraged buyouts, another does mezzanine debt for mostly French companies, and the last includes U.S. and European funds.

Groupama could not be reached for comment.

Groupama, hampered by bigger-than-average investments in equities and distressed eurozone government bonds, is the first big European insurer to suffer capital adequacy problems as a result of the sovereign debt crisis.

It has come under pressure from French financial regulator ACP to improve its solvency ratios and, in early December, sold a 44 percent stake in real estate company SILIC to raise funds.

Groupama also recently accepted an offer from state bank Caisse des Depots to buy 300 million euros in preference shares issued by Gan Eurocourtage. ($1 = 0.7817 euro) (Reporting by Leila Abboud and Elena Berton; Editing by Dan Lalor)