Rothschild FoF spins out

Updated risk-based capital holding requirements have spurred the French family banking group to offload its private equity fund of funds business to management, led by David Seligman.

Edmond de Rothschild Group has sold its private equity fund of funds arm to management in response to “changes in the regulatory and market environment”, the banking group said in a statement.

The management team of Edmond de Rothschild Private Equity Select, founded in 2003 by ex-SG Warbug banker David Seligman, will now be known as Seligman Private Equity Select. The team manages some €200 million across two fund of funds and a secondary fund, on which a final close “is imminent”.  A spokesperson for the firm declined to comment on any further details.

David Seligman

Seligman will continue targeting small European buyout and growth equity funds, and may raise a fourth primary fund in 2012, said a source close to the firm.

The management buyout follows a recent pattern among banks to spin out their private equity units. Final rules for Basel III, scheduled to go into effect between 2015 and 2018, will increase the amount of capital banks will need to hold against their private equity assets.

Among the groups to sell off private equity portfolios recently – or be in the process of doing so – are Barclays Private Equity, Bank of America, and Lloyds Banking Group.