European NatWest Partners Plan Own MBO –

Christmas came early for the executive team of NatWest Equity Partners, led by chief executive David Shaw, who reached an agreement with parent company NatWest Group to acquire NatWest Equity for an undisclosed sum.

The buyout, expected to close within the next few weeks, constitutes part of NatWest Group’s defense against hostile bids from Bank of Scotland and 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 the placing. The private equity assets in question will continue to be managed by the newly independent NatWest Equity for the immediate future, according to an announcement.

Although sale to an outside group was not ruled out, a management buyout always seemed the likeliest outcome for NatWest Equity. Similarly, the firm’s private equity portfolio, which reportedly is attracting considerable interest from potential U.S. acquirers, will most probably end up in the hands of a secondary buyer or buyers.

The assets up for sale comprise NatWest Equity’s pre-1996 investments, which are wholly owned by the parent bank; NatWest Group’s interest in investments made between 1996 and 1998 alongside other NatWest Equity client funds; and the bank’s GBP200 million position in European Private Equity Fund 1, NatWest Equity’s first formal third-party fund, which closed on GBP1 billion last April.

While the NatWest Group asset portfolio represents a prime opportunity for U.S. 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 global secondaries fund, and Coller Capital, due to hold a final close on its $400 million plus offering in the near future.