Independent merchant bank NIB Capital is spinning off its private equity division NIBC Private Equity and transferring the ownership to its joint venture partners, Dutch pension funds ABP and PGGM. The group will be renamed Alpinvest, reviving the original name of the group. The bank has taken the decision to dispose of its private equity interest in a move to improve its risk profile and concentrate on its core business of merchant banking.
The private equity group, which has around €14bn under management was formed in 1999 by ABP and PGGM following their acquisition of listed private equity house Alpinvest. The pension funds also own NIB Capital, which became a major shareholder in the private equity business. The following year the group was renamed NIB Capital Private Equity. Of the group’s funds under management, around €13bn is invested in funds across Europe and the US, €1.2bn is committed to co-investment opportunities and €0.9bn is allocated to direct investments. The business also invests in mezzanine with a €500mn allocation.
NIB Capital will transfer 100% of NIBC Private Equity’s shares to ABP and PGGM. The restructuring will also involve a one-off dividend payment of €130m in cash to the pension funds.
The impact of the spin-off on NIB Capital’s future net results will be limited. The net contribution by NIBC Private Equity amounted to €7m in 2003 against NIB Capital’s total operating profit of €124m.
Michael Enthoven, chairman of the managing board of directors of NIB Capital, said: “In line with our strategy, we will spin-off NIBC Private Equity in 2004. For NIB Capital this is a major step towards realizing the business model and achieving the right capital structure. We will now concentrate on our merchant banking activities.”