AXA PE set to buy OMERS’ portfolio

OMERS has been selling an about $780m portfolio of fund interests as it works to reduce its private equity fund commitment business and focus on direct investments.

AXA Private Equity is close to a deal to buy a $780 million portfolio of private equity interests from the Ontario Municipal Employees’ Retirement System, according to several people with knowledge of the transaction.

AXA PE, which this week closed the biggest-ever secondary fund on $7.1 billion, would pay around 96 cents on the dollar in the transaction, sources said. Several sources characterised the price as high, though AXA PE is known for outbidding other firms for what it considers high quality assets.

It’s not clear when the OMERS’ portfolio hit the market, though several sources with knowledge of the offering said UBS, which was brokering the sale, imposed a tight bid deadline. Funds in the offering included vehicles from large firms like Kohlberg Kravis Roberts, TPG, Apax Partners and Hellman & Friedman.

OMERS, AXA PE and UBS declined to comment.

Private Equity International reported exclusively earlier this month that OMERS was shopping a $750 million portfolio, though sources have said the value is closer to $780 million.

The C$55 billion pension system has been working to reduce its fund commitment business in favour of becoming a direct private equity investor. OMERS’ goal is to have about 85 percent of its portfolio in direct investments and 15 percent in funds.

Earlier this year, OMERS PE’s head of funds and co-investments, Martin Day, left the organisation because of the shift.

AXA PE announced Monday it closed its fifth secondary fund with $7.1 billion in commitments, along with a $900 million sidecar fund of funds.

The fund is already 40 percent committed; the firm agreed this week to buy a portfolio worth between €70 million and €100 million from Nordic lender Swedbank, a source close to the situation told Private Equity International in a prior interview.