European Management Lands NatWest Equity –

The executive team of NatWest Equity Partners, led by chief executive David Shaw, has reached agreement in principle with NatWest Group to acquire the management company for an undisclosed sum.

The disposal, expected to complete within the next few weeks, constitutes part of NatWest’s defense against hostile bids from Bank of Scotland and the Royal Bank of Scotland.

In parallel, NatWest plans to sell off its portfolio of private equity holdings, valued at around GBP500 million and has appointed Donaldson Lufkin & Jenrette to handle placement of those interests. The private equity assets in question will continue to be managed by the newly independent NWEP management company “for the immediate future,” according to NatWest’s announcement.

A management buyout always seemed the likeliest outcome for NWEP, given the complications inherent in selling a management company with aspirations of independence to a third party. Similarly, the NatWest private equity portfolio, which reportedly is attracting considerable interest from potential US acquirers, will probably end up in the hands of a secondary buyer or buyers.

The assets up for sale comprise NWEP’s pre-1996 investments, which are wholly-owned by the parent bank; NatWest’s interest in investments made between 1996 and 1998 alongside other NWEP client funds; and the bank’s GBP200 million position in European Private Equity Fund I, NWEP’s first formal third-party fund, which closed on GBP1 billion last April.

While the NatWest asset portfolio represents a prime opportunity for US secondaries players seeking a diversified exposure to European assets, there are also potential contenders closer to home, including Pantheon Ventures, which is currently raising a $500 million (e495 million) global secondaries fund, and Coller Capital, due to hold a final close on its $400 million plus offering in the near future.