Bridgepoint Portfolio Services, the division of Bridgepoint that looks after third-party funds, is nearing a deal to take over Edmond de Rothschild Capital Partners, a private equity unit of Edmond de Rothschild Group, PEI has learnt.
It is unclear how much Bridgepoint will pay for the Rothschild division, but the portfolio has a net asset value of approximately €170 million, according to a source familiar with the matter.
Bridgepoint declined to comment, while Edmond de Rothschild Capital Partners did not respond to a request for comment at press time.
Bridgepoint has been in exclusive negotiations with Rothschild since April and has been doing due diligence on the fund’s investments, its team of five private equity professionals and their compatibility with Bridgepoint Development Capital, the small cap arm of Bridgepoint.
The deal, which will require approval from investors in the Edmond de Rothschild Capital Partners’ funds and the financial regulator in France, will complete in the coming weeks, the source added.
It is understood Edmond de Rothschild Group plans to scale back its private equity activity and focus on private banking as its core activity.
Edmond de Rothschild Capital Partners manages Edmond de Rothschild LBO Fund (ERLF I), a €210 million 2002-vintage and Edmond de Rothschild LBO Fund II, a €300 million 2007-vintage, according to Private Equity International’s Research and Analytics division. These investment vehicles, which are fully deployed, made investments in French mid-market growth buyouts, a source told PEI in April.
In 2009, Bridgepoint Portfolio Services acquired two direct investment funds from asset manager boutique Hermes. Bridgepoint used this transaction to establish its small-cap segment called Bridgepoint Development Capital. The acquisition of Edmond de Rothschild Capital Partners will enable Bridgepoint to build out its presence in the small-mid-cap arena in France, according to the source.
Bridgepoint Development Capital is currently investing from its debut fund, a €350 million 2012 vintage. The fund focuses on buyouts and growth capital investments in businesses with an enterprise value of between €20 million to €150 million. It usually invests between €10 million to €75 million of equity per transaction.
Last August, BDC attracted a group of new investors after a group of secondary investors led by HarbourVest Partners and AlpInvest Partners acquired the BT Pension Scheme's €400 million investment in funds managed by BDC, PEI exclusively reported at the time. BDC was able to raise a further €200 million for its current fund, BDC I, at the same time as this secondary process, taking its total assets under management to €800 million. Approximately half of this total is thought to be still available for new investments.
Bridgepoint is also investing its larger flagship fund which invests in businesses with enterprise values of between €150 million to € 1 billion. Last December it bought Cambridge Education Group, an international schools operator for £185 million (€223 million, $303 million) from UK-based Palamon Capital Partners, using its current €4.84 billion Bridgepoint Europe Fund IV. This fund is approximately 80 percent invested.