AXA to reduce venture allocation

AXA Private Equity is looking to put a greater portion of its capital into private equity buyout funds to reduce its exposure to venture capital.

AXA Private Equity, the private equity division of French insurance group AXA, is looking to redress the balance of its private equity fund investments portfolio by reducing its exposure to venture capital partnerships.

The Paris-based firm said today investments in venture capital funds would in future only account for 25 per cent of capital invested, as opposed to 35 per cent today. As a result, the firm’s allocation to buyout funds will increase to around 75 per cent of total assets.

“Initially there was too much venture capital in the portfolio. We are now trying to rebalance this,” said Christophe Florin, senior investment manager at Axa Private Equity. “We prefer to have a lower risk portfolio. We also think it’s a better time to make investments in buyouts because companies can now be acquired at better multiples than two or three years ago.”

Together with the strategy change, Axa has announced three investments in buyout funds through two of its primary fund of funds vehicles, Europe Select Private Equity Partners, LP II and Americas Select Private Equity Partners, LP II.

In December 2002, Axa invested E5m in French buyout house MBO Partner’s latest fund MBO Capital and $10m in US middle market buyout fund, Green Equity IV, managed by Leonard Green Partners.

January, meanwhile, saw a E15m investment in Italian buyout fund, IPEF IV, managed by B&S Electra. IPEV IV is expected to close at the end of the week.

“These investments are part of AXA Private Equity’s strategic drive to concentrate its activities in the US and European Union and to leverage the considerable synergies that exist between its different activities,” the firm said in a statement.

With more than $4bn under management, AXA Private Equity invests in buyouts, venture capital and turnaround funds. It is also an active investor in private equity secondaries. Three years ago, it formed an alliance with US based secondaries specialist Paul Capital Partners of the US. Since then, the two private equity firms claim to have jointly invested in over 20 secondary acquisitions worth $640m.