AXA PE Goes On Block; Line Forms

The French insurer AXA has put its private equity fund manager up for sale. The most likely buyer is The Carlyle Group, which inked a similar deal earlier this year, sources told sister Web site peHub, but a number of rival fund managers also could be contenders.

Paris-based AXA Private Equity manages roughly $28 billion of assets, including funds of funds, direct funds, infrastructure and mezzanine. The unit is part of AXA Investment Managers. Credit Suisse is advising on the sale, according to sister news service Reuters. AXA Private Equity could be valued at roughly €500 million ($672 million), Bloomberg reported. Sky News, which first reported the sale, said AXA Private Equity could fetch $1.5 billion.

Washington D.C.-based Carlyle is the leading candidate, in part because it has showed an appetite for such deals in the past. Carlyle agreed in January to buy a 60 percent stake in AlpInvest Partners, a fund of fund firm that also makes direct investments. AlpInvest had €32.3 billion in assets at the time. The deal quietly closed around midyear. Harbourvest Partners and Grosvenor Capital Management had reportedly bid for AlpInvest but lost, according to press reports.

The most likely bidders for AXA Private Equity will likely be large asset managers, which could include BlackRock, Invesco and Franklin Resources, persons said. Partners Group could also be interested as well as The Blackstone Group, a buyout executive said.

A second buyout executive said AXA is selling “a piece” or control of the GP. In addition to Carlyle and Blackstone, Kohlberg Kravis Roberts & Co., TPG Capital, TA Associates, Hellman & Friedman and Warburg Pincus are likely to be interested. Other strategics that will probably look at AXA Private Equity include Lexington Partners, Collier Capital and Cambridge Associates. A few insurance firms like John Hancock or New York Life, which would like to add to their book, may also get involved, the buyout executive said.

AXA Private Equity will likely sell for a low double digit earnings multiple, the source said. “This is a manager and there are no follow-on capital requirements so this will be of interest to a lot of people,” the source said. “It should be a fairly active process.”

But any buyer would need a “big capital base” or some kind of commitment from AXA to continue funding, another buyout executive said. “A big issue would be forward funding requirements for all the PE commitments. … I think this is a very large portfolio so that will add complexity and narrow the buyer universe,” the person said.

(Luisa Beltran is a senior writer for peHub.)