Eurazeo exits non-core funds business(2)

The French quoted investment group with €6 billion under management has rationalised its business and sold its non-core interests in venture capital and real estate for $214 million to US insurer AIG.

Eurazeo, the quoted French investment group, has taken another step towards becoming a focused direct investor by selling a non-core portfolio of 28 fund investments to AIG Global Investment Group, part of the US insurance giant.

The portfolio was valued at approximately $214 million including the assumption of unfunded commitments.

Neither Eurazeo or AIG released details of the funds sold, but as recently as 2001 they included some of the biggest names in venture and real estate.

According to its annual results statement for that year Eurazeo had backed Amadeus Capital, General Atlantic Partners and Index Ventures.

In line with its holding in Lazard – Eurazeo was the largest shareholder until 2005 – it supported the investment bank’s activities extensively with investments in Lazard Capital Partners, Lazard Real Estate Funds and Lazard Technology Partners.

As of December 31, 2004, the portfolio held interests in 33 funds, with an estimated aggregate value of €220 million, compared with a total cost of €317 million. At the end of 2004, Eurazeo’s residual commitment was €42 million.

Most of the funds in which the portfolio is invested are in the process of divesting themselves of their assets, which explains how the portfolio has been able to meet its financing needs since 2002. As a result, Eurazeo’s exposure has been gradually diminishing.

Under the terms of the sale, AIG Global Investment Group has agreed to acquire $520 million in original total limited partnership commitments. The portfolio is approximately 91 percent funded.

AIG was represented in the transaction by legal advisors Gibson, Dunn and Crutcher.

Eurazeo was represented in the transaction by Triago-X and legal advisors SJ Berwin.