Tikehau takes 35% stake in Duke Street

As part of the deal, Duke Street will use the fresh capital to launch a new fund focused on acquiring controlling stakes in the European mid-market.

Following the deal, Duke Street, in partnership with Tikehau, will maintain its power to underwrite new deals in its target range.

The transaction comes after reports last month that the London-based private equity firm had hired Hawkpoint to identify new backers to replace existing investors in its funds ahead of a fresh fundraising attempt. This latest deal does not bear any relation to Duke Street's plans to enable existing investors to sell off their holdings on the secondary market. However, the sale to Tikehau does fit in with plans to raise a new fund. According to a spokesperson for the company, Duke Street has not set a formal target for its new fund, and will maintain a mixed approach combining deal-by-deal funding, as well as holding onto an equity pile to support new investments.

Duke Street abandoned plans to raise an €850m fund back in February 2012 due to lack of investor appetite.

Established in 2004, Tikehau is a multi-asset class alternative investment firm. It set up the €1.7bn Tikehau Investment Management credit fund, which invests across public and private markets.

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