Slideshow: The Private Equity Exodus

The last couple of years have seen a steady trickle of banks and insurers selling private equity assets and other non-core units as regulators globally toughen capital requirements.

In the US, the Volcker Rule, a part of the financial regulatory overhaul law that limits proprietary trading, or investments by banks using their own capital, has been forcing banks to sell part or all of their private equity portfolios.

In Europe, banks are selling their private equity assets to boost their balance sheets to prepare for the Basel III reform package which will impose capital constraints on investments. The new rules will come into force on January 1, 2013, with full implementation by 2019.

Today, we’ll take a look at some of the US and European institutions who have been offloading their private equity assets and what prices they have been getting. It also includes a couple that are on the sales block waiting to make their announcement. There are also a few among the bunch that, since being spun out, have commenced efforts–with varying degrees of success–to raise new funds. How successful these PE shops will be independently in some cases remains to be seen…


[slide title=”Bank of America”]

Headquarters: US
Date Announced: 2010
Business Spun Out: Banc of America Capital Investors
Assets Under Management: $1.4 billion
New Business Name: Ridgemont Equity Partners
Business Description: Mid-market buyout and growth investments of $25 million to $100 million in industry sectors including consumer & retail, energy, healthcare, telecommunications/media/technology, and financial services.

[slide title=”Bank of America”]

Headquarters: US
Date Announced: April 2010
Acquiror: AXA Private Equity
Asset value: US$1.9 billion
Assets Sold: High quality, mature buyout funds portfolio.

[slide title=”Citigroup”]

Headquarters: US
Date Announced: July 2010
Asset Value: $900 million
Acquiror: Lexington Partners
Assets Sold: Citi’s stakes in bank-branded fund-of-funds, mezzanine and co-investment vehicles.

[slide title=”PNC”]

Headquarters: US
Date Announced: 2011
Business Spun Out: PNC Equity Partners
New Business Name: Incline Partners
Business Focus: Buyouts, minority recapitalisations, corporate divestitures

[slide title=”Bank of America”]

Headquarters: US
Date Announced: June 2011
Business Spun Out: BAML Capital Partners
New Business Name: North Cove Partners
Assets Under Management: $5 billion
Assets Sold: Buyouts and growth equity investments

[slide title=”Key Bank”]

Headquarters: US
Date Announced: June 2011
Business Spun Out: Key Principal Partners
New Business Name: Cyprium Partners
Assets Sold: Provider of mezzanine and equity capital to profitable, mid-market companies.

[slide title=”Citigroup”]

Headquarters: US
Date Announced: June 2011
Asset Value: $1.7 billion
Acquiror: AXA Private Equity
Assets sold: 207 limited partnership interests. The portfolio was funded by Citigroup proprietary capital and does not include funds or investments managed by Citi Capital Advisors.

[slide title=”HSBC”]

Headquarters: London
Business Sold: HSBC Capital (Canada)
Date Announced: October 2011
Acquiror: Fulcrum Capital Partners
Asset value: C$2 milllion
Business Description: HSBC Capital primarily invests in the Canadian middle market, and has made approximately C$1 billion of investments in 120 companies since 1994.

[slide title=”Barclays”]

Headquarters: London
Date Announced: November 2011
Business Sold: Barclays Private Equity
New Business Name: Equistone Partners Europe (management buyout)
Asset Value: 45 million pounds ($71.7 million)
Business Description: BPE was focussed on backing management buyouts from 1996 and has invested 5.3 billion euros in 214 transactions in that time. Focus on management buyouts in businesses with enterprise values between 50 million euros and 300 million euros.

[slide title=”Crédit Agricole”]

Headquarters: France
Date Announced: December 2011
Business Sold: Crédit Agricole Private Equity (CAPE)
Acquiror: Coller Capital
Asset Value: Approximately 300 million euros ($390 million)
Business Description: Investor in French businesses encompassing LBO & Expansion; venture capital; mezzanine, renewable energy, PPP infrastructures and co-investments

[slide title=”AXA”]

Headquarters: France
Status: Pending
Business being sold: Axa Private Equity
Assets Under Management: $28 billion
Business Description: AXA Private Equity provides investors with funds across the full range of private equity offerings: funds of funds; LBO mid cap and small cap; innovation and growth; co-investment; infrastructure; and mezzanine.

[slide title=”BNP Paribas”]
Headquarters: France
Status: Pending
For Sale: US$700m book of investments in more than 50 private equity funds

Source: Thomson Reuters