A month after it concluded fundraising for its latest $5.5 billion fund, Coller Capital has fought off competition from rival secondaries investors and sovereign wealth funds to acquire a sizeable private equity portfolio from Lloyds Banking Group.
At £1.03 billion ($1.62 billion; €1.32 billion), the deal represents one of the largest secondaries transactions on record. It is also Coller’s first deal in 2012, having acquired Crédit Agricole Private Equity in December last year.
The deal structure is unusual for a secondaries transaction. Coller has financed a fund, ‘PE1 LP’, to which the assets will be transferred. Lloyds will however continue to administer and manage the assets, as well as drawing a management fee, which Coller said would be less than £10 million per annum. The deal allows Lloyds to retain relationships with the GPs featured in the portfolio, a source said.
The assets in question, “a portfolio of private equity-related investments with gross assets of approximately £1,050 million” according to a Coller statement, also feature undrawn commitments “expected to be £220 million at completion”. The portfolio generated losses of £40 million in the year to 31 December, Coller said.
The investments comprise about 70 fund commitments, mainly in European buyout funds including Apax Partners and Permira, according to a source close to the process. They also include co-investments and a small portfolio of mezzanine fund commitments, the source added.
Campbell Lutyens advised Lloyds on the sale, with SJ Berwin providing legal advice. O’Melveny & Myers provided legal advice to Coller.
There was substantial interest in the portfolio, sources said. “There aren’t many portfolios of this size in Europe, so there were a lot of interested parties,” one source close to the process said. “The usual suspects” were involved, together with “some non-traditional players like sovereign wealth funds”, the source added.