Giant Secondary Deal is a Win-Win
AXA Private Equity today announced that it has acquired a $1.9 billion portfolio of limited partner positions from Bank of America. It's the largest disclosed secondary transaction since CalPERS sold a legacy portfolio at the end of 2007 for $2.1 billion, and perhaps an indication that buyers and sellers are finally bridging their long-standing price gap. My snap verdict is that this is a win-win for both AXA and BoA. No one is disclosing pricing terms, but one can assume that AXA paid less than it would have were BoA to have opened the process to competitive bidding [Update: A source tells me that BoA did run a competitive, self-managed process, with two or three firms involved]. Moreover, continued economic recovery should help the portfolio increase in value over time (remember, people thought Lexington Partners paid too much for that $1 billion Chase portfolio back in 2000, and that worked out just fine for Lex).
