AlpInvest leads group in backing €750m German continuation fund

The transaction involves two assets managed by Deutsche Private Equity and is a first for the Munich-based GP.

AlpInvest Partners, HarbourVest Partners and Pantheon have emerged as buyers in one of the largest continuation fund transactions to come out of Europe this year, Secondaries Investor has learned.

The trio are backing a roughly €750 million deal to move two assets out of Deutsche Private Equity‘s 2016-vintage DPE Deutschland III, according to four sources familiar with the matter.

It is understood that AlpInvest is leading the consortium.

PJT Partners is advising DPE and the €750 million figure includes follow-on capital, according to two of the sources. It is not clear which companies are involved, though they are understood to be in the IT sector. PJT and Deutsche could not be reached for comment.

The transaction is signed and is set to close in early October, one of the sources said.

A vehicle named DPE Continuation Fund I was registered in April, according to public regulatory filings.

DPE Deutschland III closed on €604 million, beating its €500 million target, according to PEI data. LPs in that fund include the Netherlands’ NN Group, PEI data shows.

The deal appears to be the first continuation fund for Munich-headquartered DPE, which has €2 billion in assets under management, according to its website.

Last month, DPE’s co-chairman and founder, Volker Hichert, told German magazine Unternehmeredition that the firm, which had not set up a continuation fund at that point in time, was working “intensively” on the subject.

“We have already considered which companies would be particularly suitable for our portfolio. We definitely see this innovation as very positive and we are sure that we will do it in the future,” Hichert said, as translated from German.

Kirkland & Ellis is understood to be advising the buyside, with Stephenson Harwood advising DPE and Poellath providing counsel on German matters. All three firms declined to comment to Secondaries Investor.

The DACH region has been home to several active contributors to continuation fund deals in recent years. Munich-headquartered Emeram Capital Partners has run at least two processes including a single-asset deal on digital transformation options provider Init and a similar process on German water sports and cycling company Boards & More; Switzerland-based Ufenau Capital Partners closed a continuation fund involving two assets this year; and mid-market-focused Capvis, also in Switzerland, closed its first continuation fund last year.

AlpInvest and Pantheon declined to comment. HarbourVest did not return a request for comment.