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AXA will continue to commit despite PE unit review

The AXA Group is performing a strategic review of its private equity funds of funds unit, AXA PE, which could result in it selling the business.

French insurance giant AXA will continue to commit to AXA Private Equity funds, even if the company sells the unit, according to a person with knowledge of the situation.

“The AXA Group believes that private equity remains an attractive class … and expects to continue to invest in this asset class,” the company said in a statement released last week. As of 30 June, AXA PE managed about €6 billion on behalf of AXA Group’s insurance companies.

AXA PE declined to comment.

The news of AXA’s continuing support comes as several firms have expressed interest in acquiring the unit, which consists of funds of funds and secondary vehicles. Kohlberg Kravis Roberts is exploring a potential acquisition of the unit, according to one person with knowledge of the talks. A media report Monday said 3i also is considering a deal for the team.

Last week, AXA issued a statement revealing it had “initiated a strategic review of its shareholding” in AXA PE. “The AXA Group has always been opportunistic in its approach to strategic transactions and will decide whether or not to pursue a transaction only after completion of the strategic review,” the company said.

Any transaction would be “structured with a view to preserving AXA Private Equity investment expertise and performance-driven culture”, the firm said.

Sources told Private Equity International last week that the most likely buyer of AXA PE would be a sovereign wealth fund or a large private equity firm that would keep the team’s management in place. The head of the unit, Dominique Senequier, has run AXA PE since 1996 and “has always run the business quite independently”, a secondary market source said in a prior interview.

“She’s always been proud of being part of AXA, but she doesn’t need a babysitter,” the source said.

The Carlyle Group’s acquisition of a large stake in Alpinvest earlier this year is a model for a sale of AXA PE, according to the person with knowledge of the firm. “It’s important to keep management intact for LPs,” the person said. Not just senior management, the person said, but “the team under them”.

Under the Carlyle acquisition, Alpinvest retained control over all investment decisions and kept sole access to all LP information.