AlpInvest attracts 'several' bidders

AlpInvest Partners, one of the biggest limited partners in the world with €46 billion under management, is being auctioned in a sale that includes “several” interested bidders, according to multiple sources.

AlpInvest is owned by two Dutch pensions: the €240 billion APG and €86 billion PGGM. However, since last year, reports have been surfacing in Dutch financial newspapers that PGGM planned to withdraw or reduce its backing for AlpInvest and would instead ramp up its own in-house private equity activities.

In an email exchange in September 2009, AlpInvest chief executive and managing partner Volkert Doeksen played down the reports, telling PEO that PGGM was “firmly expected to remain one of the most significant investors going forward”.

Multiple sources have confirmed that Credit Suisse is now running an auction for AlpInvest. It’s unclear which firms are bidding, but one institution that may have expressed interest in the massive Dutch fund of funds is the $25 billion Common Fund. The Common Fund, which invests on behalf of university endowments, hospitals and other organisations, did not return a request for comment.

Credit Suisse declined to comment and AlpInvest did not return multiple calls and email requests for comment. Private Equity Insider first reported the potential sale. The structure of the sale is also unclear, but market sources tell PEI the pensions are looking to sell the whole company.

Some sources questioned the viability of an AlpInvest sale given the scale of its operations. “They have so many people and offices,” one person said, noting the costs of maintaining a large staff ultimately impacted the bottom line.

AlpInvest had 121 full-time employees at the time the institution’s 2009 annual review was published, up from 118 in 2008. The institution brought in €60.3 million of revenue in 2009, compared to €92.2 million in 2008. Salaries cost AlpInvest €33 million in 2009 and €38 million in 2008.

Since 1999, capital committed to AlpInvest grew from €600 million to €46 billion, according to the institution’s 2009 annual report. The institution’s gross internal rate of return in 2009 was 9.2 percent, the same as 2008, which was significantly down from 2007, when the gross IRR was 15.6 percent.

In 2009, APG committed €5.2 billion to AlpInvest for coinvestment and secondaries opportunities in 2009, 2010 and 2011.

AlpInvest has started targeting secondaries investments, reportedly considering a €400 million transaction to acquire the European private equity fund portfolio of the Royal Bank of Scotland. It’s not clear if that deal has closed.

The institution also was involved in a deal in March in which the San Diego County Employees’ Retirement Association terminated its relationship with Brazos Private Equity Partners and transferred its full stake, or $14.5 million in uncalled commitments, in Fund III to AlpInvest for $1.

AlpInvest was incorporated in 2000 as NIB Capital Private Equity.