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Blackstone to acquire Credit Suisse’s secondary private equity business

Private equity giant Blackstone has said it is acquiring the international financial services firm Credit Suisse’s secondary private equity business Strategic Partners. The business has $9 billion assets under management and is being divested as part of Credit Suisse’s strategic divestment plans which were announced last July.

However, the terms of the deal have not been disclosed. The transaction is subject to customary closing conditions and is expected to be closed by the end of the third quarter in 2013.

Commenting on the acquisition, Blackstone’s president and COO Tony James said, “Strategic Partners complements Blackstone’s existing businesses, and we expect to be able to grow its franchise and help it enter new product areas.”

James was previously with Credit Suisse before he was handpicked by Blackstone over a decade ago.

Alastair Cairns, co-head of Credit Suisse’s legacy asset management business, added, “Strategic Partners is a leader in the secondary private equity space. We are pleased to have reached this agreement and are confident that with Blackstone, Strategic Partners will continue to build on its excellent track record.”

Strategic Partners seeks capital appreciation through the purchase of secondary interests in private equity funds from investors looking for liquidity. From its start in 2000, it has raised over $11 billion in capital commitments, completed 700-plus transactions and acquired more than 1,400 underlying limited partnership interests.

Its team of 26 secondary investment professionals is headed by Stephen Can and Verdun Perry.

The unwinding of the PE business by Credit Suisse is part of the moves by other banks to snip or get out of such alternative asset management business as required by the Volcker rule and Dodd-Frank Act, which put limits on banks to participate in such assets after the financial crisis of 2008-09.

Credit Suisse AG is a part of the Zurich-headquartered Credit Suisse group of companies that operates in more than 50 countries. 

Earlier this year, Asia Growth Capital Advisors (AGCA) acquired the portfolio of private equity investments in Asia from Credit Suisse, its affiliates and other investors in Credit Suisse Private Equity Asia Partners (CSPEA). AGCA worked with HarbourVest Partners, the lead investor in this transaction.

AGCA is a Singapore-based private equity firm that focuses on opportunities in India and the South-east Asia. It was founded in 2010 by Harjit Bhatia and Soma Ghosal Dhar, former chairman & managing partner and partner, respectively, at CSPEA.

Credit Suisse Private Equity had previously made investments in firms such as Indu Projects Ltd, Shree Ganesh Jewellery House Ltd, InterGlobe Technology Quotient Pvt Ltd, Tecpro Systems Ltd and Binani Cement Ltd.

(Edited by Sanghamitra Mandal)

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