Deutsche Bank has continued the process of reducing its exposure to private equity with the sale of a further tranche of its portfolio of private equity investments.
In February, a consortium led by NIB Capital and including HarbourVest Partners, Paul Capital Partners, Bregal and Coller Capital, funded the E1.5bn spin out of MidOcean Partners from the bank with a portfolio of later stage direct investments.
The latest sale sees Credit Suisse First Boston acquire a portfolio of investments with a reported value of $400m to $500m. Both banks have declined to comment on the transaction.
According to Reuters, the deal marks the largest transaction to date for CSFB Strategic Partners, which has raised over $1bn for secondary acquisitions. The acquisition adds more than 30 funds, most of which are focused on US buyouts, to about 20 funds the group already possessed it is reported.
CSFB has been seeking to boost its exposure to private equity during 2003, particularly via the secondaries market. In May, the bank acquired around two thirds of the private equity and venture capital holdings of Private Equity Investor, the troubled Swiss private equity firm which was struggling to make a loan repayment to major backer Swiss Life.
Under CEO Josef Ackermann, Deutsche Bank has pursued a narrower focus on global investment banking and asset management and European retail banking. Prior to the MidOcean deal, Deutsche Bank's entire private equity portfolio was valued at about E6bn. The bank has sought to reduce its exposure by about 40 per cent.
Deutsche Bank is one of a number of large financial institutions that has had to write down the value of its investments because of falling stock valuations. The bank’s remaining portfolio comprises private equity and venture capital assets, its industrial holdings, third-party private equity funds and principal-owned real estate assets.