With a view to improving cash flow of its investment portfolio, Private Equity Holding has announced the secondary sale of seven portfolio fund investments for a total cash consideration of CHF243 million. The firm will make a CHF20 million profit on the sale, but the fair value of the remaining portfolio will be reduced by around CHF7 per share. Private Equity Holding has agreed not to disclose the names of the fund investments or the buyer.
Private Equity Holding recently broke free from its parent Swiss private bank Vontobel, following a breakdown in trust between the two parties. As a result, it has appointed Swiss Life Private Equity Partners as manager and adviser. The disposal of part of the portfolio is part of a cash flow plan looking forward, said Eva Kalias of Private Equity Holding. She said that it will achieve two prime objectives. It will allow the firm to lock in on unrealized value appreciation on certain investments in a questionable economic environment, with more of a focus on the quality of the private equity portfolio. Secondly, outstanding commitments will be reduced to a more manageable level, in the light of prolonged harvesting cycles that have been witnessed in general.
The transaction reduces outstanding commitments from the firm to private equity funds to the amount of CHF98 million. Total commitments prior to the divestiture of the seven investments reached CHF2.7 billion. This has been reduced by CHF366 million with the current value reaching CHF2.35 billion.
Private Equity Holding offers investors the opportunity to invest, within a simple legal- and tax-optimized structure, in a diversified and professionally managed private equity portfolio. The firm now holds fund investments in 82 funds and direct investments in 47 companies.