Report: PPM Capital to spin out

PPM Capital may reportedly spin out from Prudential as part of a management buyout of the UK mid-market private equity firm.

UK-based PPM Capital is in talks with its parent company Prudential regarding a possible spin-out of the mid-market private equity firm later this year, according to a report in UK newspaper The Daily Telegraph.
 
The management team at PPM Capital, headed by managing director Neil MacDougal, expects to close the deal by the end of the year, the article said, quoting unnamed sources.
 
PPM Capital declined to comment.
 
London, Munich, Paris and Chicago-based PPM Capital primarily invests from Prudential’s balance sheet in European businesses, with a focus on English, French and German speaking countries, as well as US-headquartered businesses that have or are developing activities in Europe. A team of 26 investment professionals currently has assets of over €2 billion ($2.57 billion) under management.
 
The firm only adopted its PPM Capital moniker last May when it decided that PPM Ventures was too suggestive of venture capital. The fund of funds arm of the business was also renamed PPM Partners as part of the rebranding.
 
In March, UK insurer PPM Capital split from its Sydney-based mid-market private equity operation, Catalyst Investment Managers, which it acquired in 1998. In 2000, the firm announced the successful close of the Catalyst Fourth Buyout Fund with AU$180 million (€104 million; $134 million) of capital. However, the two entities failed to reach agreement on terms governing a new fund and the relationship was dissolved. Catalyst is now an independent outfit.
 
No reason was given as to why PPM Capital’s management has decided to pursue a buyout of the private equity division. However, PPM Capital is understood to be currently raising its first third party fund.

Earlier this week, PPM Capital acquired voice and data services company Azzurri Communications from 3i for £182.5 million (€266 million; $343 million). 
 
Other captive private equity teams to have spun out in recent years include RJD Partners, which changed its name from Royal London Private Equity when it separated from The Royal London Mutual Insurance Society Limited last November; ISIS Equity Partners, which became independent from F&C Asset Management in June 2005; and Montagu Private Equity, which spun out from HSBC bank in 2003.