WestLB Prepares For Final PE Exit –

While private equity is very popular among institutional limited partners, there are still plenty of them leaving the asset class. German investment bank WestLB is the latest to exit the private equity marketplace as it prepares to spin off its last private equity unit on the secondary market, which includes the sale of its stake in its WPE Fund 2000.

The firm will spin off West Private Equity, a buyout group started in 1999. The London-based group manages WPE Fund 2000, a $365 million buyout fund that invests in U.K.-based companies valued between $18 million and $134 million. WPE Fund 2000 invests in service industry companies such as those in the business outsourcing and technology, financial services, healthcare, education and media services. The fund is authorized to do specialist consumer, retail and industrial service company deals. The firm is raising a new independent fund.

WestLB declined to comment on the latest potential portfolio sale, but the bank has acknowledged its focus on selling off its private equity holdings.

The move will conclude the shedding of private equity assets, which the bank has been doing for several years in order to focus more on its client banking services. The bank says that private investment will still be possible for its banking clients, though it has not detailed just how it would invest in private equity in those instances.

Cipio Partners announced last October that it won a corporate venture auction for the venture portfolio of West STEAG Partners, the corporate venture group founded by WestLB and STEAG Electronic Systems to fund startups in the analytics, electronics, optics, MEMS and IT sectors. Prior to the Cipio deal, Boston’s HarbourVest Partners bought assets of the WestLB Growth Fund from West LB. While the firms declined to disclose the price of the assets, the 15-company portfolio has $75 million in original commitments from West.

One source familiar with the new offering says that niether HarbourVest nor Cipio is involved in the current WestLB transaction. HarbourVest and WestLB declined to comment on the pending secondary sale.