Bregal pulls back on $400 mln secondary sale

Bregal Investments had hired Evercore Partners to run the sales process.

The firm pulled the sale because it was not happy with the bids it received, one of the people said. It had expected to get higher pricing in this secondaries environment, which has featured some bidding on fund stakes at premiums to net asset value, according to the sources, as well as recent secondary pricing reports.

It is not clear if Bregal will try again to sell the portfolio. Bregal did not respond to a request for comment.

The funds, from Bregal Investments’ funds group Bregal Private Equity Partners, were all pre-2008 vintages, a source told peHUB in a prior interview. Like many LPs in today’s high-priced market, the firm was interested in “cleaning up” older vintage funds from its private equity program, one source said.

High pricing is driving LPs to the secondary market to clean up big portfolios, or exit non-core relationships. This has pushed secondaries volume to at least $16 billion in the first half of 2014, according to secondaries intermediary Cogent Partners. Intermediary Setter Capital reported first half volume at around $22 billion.

Cogent found the average high bid for all strategies on the secondary market was 93 percent of net asset value in the first half. Those levels were driven mainly by buyout funds, where the average high bid increased to 100 percent of net asset value, according to Cogent’s first half pricing report.

Fund investments are one of several private equity businesses within Bregal Investments, the private equity arm of a European holding company called COFRA Holdings. COFRA is controlled by the wealthy Brenninkmeijer family.

Bregal Investments is made up of European mid-market group Bregal Capital, North American mid-market shop Bregal Partners, energy focused Bregal Energy, growth investors Bregal Sagemount and the funds group Bregal Private Equity Partners.

Chris Witkowsky is editor of peHUB.