AXA confirms PE unit sale, bidders line up

Greg Gille
29 September 2011

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Insurance group AXA has confirmed that it is currently reviewing options for the sale of its private equity unit, AXA Private Equity (AXA PE).

The insurer has mandated Crédit Suisse to look at options for the divestment, according to sources close to the situation. AXA, however, stressed that the review was in its preliminary stages and that a sale was only a possibility for the time being.

While the price of $1.5bn has been reported since news broke last week, sources said a €250-450m price tag would be more realistic. A Paris-based GP told unquote" that he didn't rule out a valuation in the region of €600m.

The sale would only concern the management company AXA PE – AXA would remain an LP in the funds it manages, according to sources. The insurance group didn't explicitly confirm this, but commented on its private equity allocation going forward: "The AXA Group believes that private equity remains an attractive class for the diversified investment portfolios of the group's operating insurance companies and expects to continue to invest in this asset class," AXA said in its statement.

AXA PE should attract interest from various buyers – including PE rivals and asset managers. KKR and Canadian pension fund Caisse de dépôt et placement du Québec are considering bidding for the asset, according to media reports.

It is also understood that a management buyout remains a possibility. CEO Dominique Sénéquier – one of France's most high-profile business women – and the members of AXA PE's top management could then team up with a financial backer.

Several motives have been put forward to explain AXA's move, including more stringent capital requirements under Solvency II rules and the insurer's wish to focus on its growing Asian business.

Established in 1996, AXA PE has grown into a firm managing $28bn of assets, both through direct investments and its funds-of-funds activity. It also manages mezzanine and infrastructure funds.

Recent AXA PE deals include the €500m SBO of French electronic equipment business Photonis from Astorg and the €133m purchase of a 52.3% stake in Groupe Outremer Telecom as part of a pending take-private transaction.

But AXA PE has also been busy acquiring large LP interests in private equity firms over the past few months: it bought a $740m portfolio from Barclays in July and acquired 18 LP stakes focused on European mid- and large-cap buyout funds from HSH Nordbank in August – the portfolio represents €478m in original commitments.