What kind of challenges has AXA Private Equity faced in moving the proposed spin-out from AXA, the parent organisation, toward the finish line?
It’s quite a complex transaction because you have to make sure the sellers, the buyers and the limited partners, are fine with the transaction. This type of transaction always takes a long time, it’s highly complex and takes time to get right. We want to make sure at the end that we find a solution will take place, a solution that will guarantee the clients’ interests, and more importantly to make sure it will ensure continuity with the management remaining in control of all investment and operational decisions.
Also, for the new partners (the external investors), you have to make sure they have a clear understanding of our business, and a clear understanding of what could be our business in the future.
The deal is not complete yet, correct?
Do you have any concerns that, with AXA, the parent organisation reducing its stake, raising funds as an independent entity will become even more important?
AXA will stay a shareholder of the company in a minority position, and [it] will continue to invest alongside us in private equity. AXA has been and will stay a great partner. In a programme of €4.8 billion, it makes sense for them to keep their investments with us. In addition to AXA, we have many many other LPs, many other investors. We have been able to diversify our base of clients. In each fund we manage, we have AXA but also many other investors.
How has AXA PE managed to keep its focus on its core responsibilities like investing in secondaries, or mid-market buyouts, while trying to get through the complex sales process?
We were able to raise the secondary fund with $7 billion, also €1.75 billion for the infrastructure fund … we clinched various secondary deals in Europe, the buyout team has been active in terms of buyouts and exits. As an investment team, we’ve continued to work hard and strongly in terms of investments and fundraising. It illustrates the strong organization – that we were able to manage investments at the same time.
Benoît Verbrugghe is head of AXA Private Equity's New York office.