AXA PE eyes further secondary deals

The group's ability to source and execute deals - as demonstrated by its acquisition of a Swedbank portfolio this week - persuaded LPs to support a significant increase in AXA's latest secondaries fund.

Investors in AXA Private Equity's latest secondaries fund, which closed on Monday with $7.1 billion in commitments, approved the firm's decision to double its target based on its ability to source and execute deals, according to the firm.

As if to illustrate the fact, AXA PE has this week agreed the acquisition from Nordic lender Swedbank of a portfolio of fund interests worth between €70 million and €100 million, according to a source close to the situation. The firm declined to comment.

In addition, AXA PE is pursuing deals with a handful of US pension funds, and has reached exclusivity on one of them, a source with knowledge of the matter said. The deal, with an undisclosed US institutional LP, is thought to be worth in the region of $700 million.

Investors in AXA Secondary Fund V were sufficiently impressed by the firm's track record to re-up in significant numbers – 95 percent of LPs in AXA PE's previous funds committed to the new vehicle, according to a source close to the situation.

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Vincent Gombault, AXA Private Equity

Re-upping investors accounted for 50 percent of the overall capital raised for the new fund and its $900 million sidecar which will act as a primary fund of funds.

Vincent Gombault, managing director of AXA PE's funds of funds and private debt, spoke to Private Equity International about how his firm was sourcing deals.

“There are still a lot of banks looking to sell private equity assets, so the pipeline is looking strong,” Gombault said. “Other dealflow won't come from insurance companies, who I think will continue to hold onto their private equity fund interests. The new sellers, particularly in North America, are going to be pension funds. Many are reorganising their portfolios and focusing on a few core relationships, which means they'll be looking to offload assets,” he predicted.

Gombault stressed he and his team were in no hurry, having already deployed 41 to 42 percent of the current fund over the last couple of years. They have five years in which to deploy the remaining capital, he said.

The fundraising of AXA Secondary Fund V was completed without recourse to a placement agent, Gombault said. The AXA PE team had close to 500 meetings over the course of the 18 month fundraising process, which yielded commitments from about 100 LPs, Gombault added.