Deutsche Bank Capital Partners

01 April 2003

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Deutsche Bank Capital Partners (DBCP), the later-stage investment vehicle of Deutsche Bank, has been bought out to 100% by a new general partnership, MidOcean Partners, in a EUR 1.5bn deal. A mix of both primary and specialised secondary investors provided financial backing for the new vehicle. NIB Capital Partners, which supplied EUR 312m, led the investment; the other three main buyers were Ontario Teachers' Merchant Bank, CPP Investment Board, and HarbourVest Partners. Together these four groups accounted for around 90% of the total purchase price. Bregal, Northwestern Mutual, the Yucaipa Companies, Presidential Life, Coller Capital - which recently announced the purchase of BT Brightstar - and Paul Capital Partners also participated. Deutsche Bank has retained a 20% interest.

Company

The portfolio comprises 80 later-stage investments in Europe and the US, and includes the UK-based United Biscuits and Center Parcs, as well as Irish packaging company Jefferson Smurfit. Other investments include the Continental European holding company, Lecta, and US investments Jostens, Prestige Brands, Noveon and Jenny Craig. MidOcean Partners will also run Deutsche Bank's remaining private equity assets, which comprise predominantly a EUR 2bn private equity funds-of-funds business, previously associated with DBCP, as well as venture capital assets and Morgan Grenfell funds, most notably the EUR 1.5bn Deutsche Equity Partners IV. Regarding further reductions in exposure, the bank has announced there will be no outright sale of Morgan Grenfell Private Equity itself. However, away from the funds-of-funds business, the bank has expressed an intention to reduce exposure further, implying an interest in selling its venture capital assets.

People

Ted Virtue, chairman and chief executive officer at DBCP, and Graham Clemson, European managing partner at DBCP, are founding parters of MidOcean. Alex Wieandt will take over from Ted Virtue as head of Corporate Investments at Deutsche Bank. The Corporate Investments division includes DBCP and Deutsche Bank Investor, which comprises the Bank's industrial interests.

Advisors

Equity - Debevoise & Plimpton, London, (Legal).