Paribas Affaires Industrielles (PAI), the private equity affiliate of French bank BNP Paribas, has been spun-out by its parent. PAI’s management team, led by CEO and chairman Amaury-Daniel de Seze, has acquired a 51 per cent stake in the company and will acquire the remainder between the end of this year and the beginning of 2008.
Working within an assistance and advisory agreement PAI’s management, a team totalling 40 professionals including 15 partners, will receive a fee for the continued management of the existing portfolio. PAI, which is due to close France’s largest buyout fund at around EURO1.8 billion, believes the independence of the management team is a prerequisite for securing third party investments. Independence should also avoid conflicts of interest and ensure the dedication of the management team. PAI Europe III has already invested in last year’s Antargaz buyout as well as LD Com and the acquisition of a 50 per cent stake in yoghurt producer, Yoplait. The combined total of PAI’s buyout funds, which includes third party money, and BNP Paribas’ portfolio of investments (the former Paribas portfolio) is EURO7 billion.
In a statement of its strategic plans for the next three years the bank said it intends to reduce commitments to private equity to EURO1.2 billion by 2005, compared with EURO2 billion last year. BNP Paribas Capital will continue to make private equity investments through funds (EURO700 million in the next three years) and co-investments (EURO400 million in the same period). The bank’s portfolio of direct investments will be downsized by 70 per cent.