AlpInvest spinout abandons fundraising

AlpInvest Partners, Europe’s largest backer of private equity funds, has pulled the plug on its own spinout team Taros Capital’s fundraising.

The €30 billion fund investment giant AlpInvest has put spinout Taros Capital’s future into question by withdrawing its cornerstone investment and effectively forcing Taros to abandon its plans for a €350 million fund.

One source familiar with the fundraising said AlpInvest had decided to pull out because Taros had struggled to attract external investors for the Benelux and Germany focused mid-market buyout fund since the firm won its independence at the start of the year.

Lazard acted as placement advisor. It declined to comment.

Taros retains the mandate to manage the investments made while the team was part of AlpInvest. However, what will happen once those investments are sold is uncertain.

Alexander van Wassenaer, one of Taros’s managing partners, said a decision would be made over the next couple of months how and whether Taros would come back to market. He would not comment on the decision with his three co-managing partners Paul Lamers, Jan Moulijn and Christian Bächle to abandon fundraising.

Taros will continue to manage its capital pool of €550 million, he said. A significant portion of the capital remains to be invested in the group’s target markets in the Netherlands, Belgium and Germany. This is available for follow-on investments in existing portfolio companies.

Wassenaer: no fire sale

Van Wassenaer said: “The companies in the portfolio are owned by AlpInvest and other shareholders and that will continue to be so. There is no fire-sale or orderly winding down of the portfolio. The mandate [to manage the portfolio] from AlpInvest is unchanged in that regard.”

One investor said: “AlpInvest’s U-turn is embarrassing, but at least it has not dragged on indefinitely. It has dealt swiftly with a situation that could have damaged its reputation as a brand name investor.”

Doeksen: powerful player

At the time of the spinout Volkert Doeksen, managing partner and chief executive of AlpInvest, said in a statement: “The buyout team has developed into a powerful player in the buyout market and is ready to profile itself independently in the market.”

He said, in an interview with PrivateEquityOnline in October 2005, the transaction would create a clearer picture of the respective positioning of the two groups and give Taros the flexibility to diversify its investor base going forward. He was unavailable for comment on the failed fundraising.

Following the separation, AlpInvest has focused on its primary and secondary fund investment businesses in private equity and mezzanine finance. It has participated in large direct transactions as a co-investor, most recently in the acquisition of electronic goods giant Philips’s semiconductor business this week and in the buyout of VNU, a Dutch media and marketing group.