AlpInvest, the largest private equity investor in Europe, is taking another reorganisational step that will see its direct investment team spun off to become Taros Capital.
The mid-market buyout team, which will become independent from January 1 2006, will continue the management of AlpInvest’s direct portfolio in the Benelux region and Germany. The portfolio, which is valued at €550m, includes Dutch companies Raet, Delft Instruments and Sunweb, Taminco from Belgium and Novem from Germany.
AlpInvest is Europe’s largest private equity investor and has €20bn under management across the asset class. The group was established in 1999 by major Dutch pension schemes ABP and PGGM, when they decided that their holdings in private equity would be best served through a dedicated investment company. AlpInvest became part of investment bank NIB Capital in 2000 and was the subject of its own spin-out four years later.
After the current spin-off, AlpInvest will focus globally on primary and secondary fund investments, co-investments and mezzanine, where the main part of the current mandate is invested. It will remain active in direct deals through its co-investment programme, which has seen it invest in larger buyouts such as Vendex, AA, GNC and Nycomed.
Taros Capital will continue to focus on lead buyout investments in mid-sized companies headquartered in the Netherlands, Belgium and Germany. Significantly, the group would also be able to begin marketing itself to third-party investors and to expand its shareholder base beyond PGGM and ABP, which are thought to control around 99% of the equity.
“When we made the investment in Vendex alongside KKR, there was some confusion in the Dutch market about our focus,” Volkert Doeksen, CEO of AlpInvest Partners, told IFRBuyouts. “This agreement means that AlpInvest will now be able to focus on maximising its strength as a fund-of-funds and secondary player as well as a co-investor on the larger deals
“There is a natural link between these parts of the business and the direct investment arm was always somewhat outside this core focus. While we will continue to invest in Taros funds, the move also allows them to dictate their own strategic direction and to raise their own third-party capital.”
The spin-out will also renew speculation about the future of Netherlands-based mid-market peer ABN AMRO Capital. While the group has said that it is happy with its current status as one of the few remaining captive European private equity groups, there have also been signs that it is readying itself to attract more external capital.
Under the leadership of Gerben Kuyper, ABN’s diverse European activities have been brought under a more coherent pan-European framework. As part of this exercise, European returns have been quantified on a long-term basis in order to benchmark performance against the rest of the market.
Unusually for a captive player with very limited third-party commitments, the group has also recruited a dedicated fundraising team, headed by Gabriel Marino. It has further strengthened its investor relations capability with the appointment of Sasja McCann.