KKR And BlackRock Eye Axa Private Equity

30 September, 2011

Kohlberg Kravis Roberts and BlackRock have expressed interest in buying Axa Private Equity, the French alternative asset manager that has been put up for sale by Axa, the French insurer.

The two US asset managers are among a handful of potential bidders that have been asked to submit first-round offers for the private equity group early next week, people close to the situation said.

The private equity group’s management and Axa, its parent company, have preselected potential bidders in the past few weeks, they added.

Dominique Senequier, the well respected French manager who started Axa Private Equity 15 years ago, is seen as the linchpin for any deal. The group’s chief executive and her management team are believed to be interested in a management buy-out with the backing of one of the bidders.

People close to the situation said this year’s takeover of AlpInvest, the Dutch asset manager, by Carlyle Group could become a blueprint for a deal. Carlyle bought the group with its €32b ($43bn) in private equity funds mostly to increase its asset under management ahead of a planned initial public offering, but it has crucially kept it largely at arm’s length.

Investors in private equity funds usually loathe the replacement of a successful fund management.

Axa Private Equity is among Europe’s largest private equity managers, having grown its assets under management to $28bn this year. It invests directly in infrastructure, venture capital and medium-sized companies, takes minority stakes in large buy-outs and has a large fund-of-fund business. It also buys whole portfolios of companies from banks as well as investor stakes in other private equity groups.

Ms Senequier is well acquainted with the buy-out veterans of the private equity industry such as Henry Kravis, KKR’s co-founder. Axa Private Equity has often invested in the large buy-out funds and respected brand names such as Blackstone, KKR and TPG, and it has done a number of co-investments in single deals with these groups as well.

Axa Private Equity, BlackRock and KKR declined to comment.

Axa this week confirmed it had “initiated a strategic review of its shareholding in the private equity firm”, which is estimated to be worth up to €450m.

The French insurer said the potential sales plans would not precipitate any changes in its investment strategy in private equity. “The Axa Group … expects to continue to invest in this asset class,” it said.

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KKR And BlackRock Eye Axa Private Equity

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