Virtue close to DB Capital MBO

NIB Capital, HarbourVest and the Brenninkmeyer family are believed to be the backers of an imminent E1.5bn management buyout of DB Capital Partners’ direct investment business from Deutsche Bank.

Ted Virtue, chairman and CEO of Deutsche Bank’s private equity unit DB Capital, is close to agreeing a deal with the German bank which will see him take over a portfolio of direct private equity investments worth around E1.5bn.


German newspaper Handelsblatt reports that Virtue has secured the backing of a number of major institutions to finance the buyout, including NIB Capital, fund of funds specialist HarbourVest and the German Brenninkmeyer family. A deal could be announced as early as next week.


The assets in question include Center Parcs, the leisure concern bought out in December 2000 for E1.1bn, and United Biscuits. DB Capital would still hold private equity investments worth around E2bn after the transaction.


Talk of a possible MBO at DB Capital first spread in early October when it emerged that the bank was looking to scale back its private equity operations following a sharp fall in the division’s technology and telecoms investments. Later, it emerged that Virtue was talking to NIB Capital, an unnamed fund of funds manager and a European family office about ways of funding an offer.


For the Brenninkmeyer family, owners of European retailer C&A, participation in the transaction would be the second high profile commitment to a private equity manager in as many months. In January, the Swiss-based family was revealed as a cornerstone investor of Englefield Capital, a London-based buyout operation established by Dominic Shorthouse. The family invested E495m in Englefield’s E660m first time fund.


Today Virtue and London-based fellow DB Capital executive Graham Clempson declined to comment. A source at Deutsche Bank insisted the deal had not closed.


A spokesperson for HarbourVest in London also refused to comment. Calls to NIB Capital were not returned.