AXA closes fourth LBO fund on €1.6bn

AXA Private Equity has raised €1.6 billion ($2.4 billion) for its fourth buyout fund, a substantial size increase from its predecessor fund, closed on €500 million in 2005.

Dominique Senequier, chief executive of the insurance company’s private equity group, told PEO the smaller size of Fund III had forced AXA to do some large deals separately, outside the fund.

Fund IV “is such a size that we can go above the previous scope and we can reach companies with up to €2 billion” market capitalisations, she said.

Dominique Senequier

“We will focus on companies which are well positioned for the long term trends of the global economy,” she said, noting the importance of investing in companies with international sales outside of Europe.

“We will try also to find companies which can develop their business in Asia in order to allow for growth in this part of the world,” Senequier added.

Unique from its predecessor, Fund IV will – in addition to Germany and France – invest in Italy, where AXA opened an office in 2006.

In last four years, Senequier said, AXA invested roughly €400 million in Italian companies across its varying private equity strategies, a small fraction of the $22 billion the firm manages.

Raised without a placement agent in roughly eight months, Fund IV garnered commitments from approximately 95 percent of AXA’s existing investors, which include CDC Capital, the buyout arm of Canadian pension Caisse de Depot et Placement du Quebec.

Senequier expects the fund will be deployed within approximately three years, and notes that current credit market conditions hampering highly levered and or mega-deals are not affecting the market segment AXA targets.

Already, AXA has committed 25 percent of the fund to acquire three businesses: French animal feed ingredient company  Diana Ingredients; Unipex, a former specialty chemical division of Canada’s Atrium Innovations; and Löwenplay, the second largest operator of games arcades in Germany.

It will likely obtain a total of 13 to 15 portfolio companies, Senequier said.