Duke Street mulls stake sale to French GP

The UK firm, which turned to a deal-by-deal approach after abandoning plans to raise a fund last year, is understood to be in talks to sell part of itself to Tikehau.

Duke Street Capital, the London-based mid-market investor, is reportedly looking to sell a 35 percent share of itself to Paris-based asset manager Tikehau Group.

The transaction, if completed, could raise as much as €30 million, according to Bloomberg. Tikehau could then have the option to increase its holding in the future, the report said. It is understood that the proceeds would be used by Duke Street as an anchor to raise a new vehicle, which could aim to collect up to €300 million.

Duke Street did not respond to request for comments. Tikehau declined to comment.

Duke Street, the owner of Japanese restaurant chain Wagamama, pulled fundraising for a €850 million vehicle at the beginning of last year, and has since resorted to a deal-by-deal approach to finance acquisitions. The first and only such buyout completed by the firm was UK-based LM Funeral, bought for £37.5 million (€43.9 million, $56.4 million) from buy-and-build specialist Sovereign Capital in April 2012. 

Duke Street’s latest vehicle was Fund VI, which closed on €963 million in 2006. The fund is now fully invested.

Earlier reports stated that Duke Street was seeking new backers in the run-up to a fresh €1 billion fundraising effort, with Coller Capital, Pantheon and HarbourVest among the potential bidders.

A move by Tikehau would be the firm’s second capital injection in another asset manager, after it took over Salvepar, a Paris-listed investor in listed and private companies. Salvepar was previously owned by French lender Societe Generale.   

Tikehau’s other subsidiaries include Tikehau Capital Partners, an evergreen fund, Tikehau Investment Management, its credit asset manager, and Tikehau Capital, which manages both structures. TCP operates credit, real estate, listed equities and private equity funds, whilst TIM exclusively invests in public and private debt. 

The French GP, founded in 2004 by a group of former investment bankers, has close to €1.6 billion of assets under management.