Deutsche buys in GMT GP-led deal

The bank’s private equity unit has joined a group of buyers to provide liquidity to LPs in the buyout firm’s 2006-vintage fund.

DB Private Equity has emerged as one of the consortium of buyers in the process on GMT Communications Partners’ 2006-vintage buyout fund.

The private equity unit of Deutsche Bank picked up a stake in GMT Communications Partners III from European Investment Fund, according to a UK regulatory filing.

In a statement on Wednesday by Weil, Gotshal & Manges, which acted as legal advisor on the deal, the process received “unanimous consent” from existing investors and gave LPs the “opportunity to realise their interests in the fund or recommit to a new vehicle backed by a consortium of leading global secondaries investors”.

While details of the process were not disclosed, Nigel Clark, a partner in Weil’s London Private Funds Group, said the transaction came “off the back of a number of other successful restructurings we have led in recent years”.

It is unclear which other buyers joined DB Private Equity in the deal.

GMT Communications Partners III is a €342 million fund managed by London-headquartered GMT Communications Partners, according to PEI data. The vehicle, which invested in targets across the TMT sector of Western Europe, attracted a €40 million commitment from EIF.

Investments made by GMT Communications III that are yet to be realised include stakes in Dutch shared hosting company IT-Eternity, which it acquired in 2013, and UK-based outdoor advertising company Primesight, which GMT acquired in 2007, according to the company’s website.

GMT has prior experience with restructurings. In July 2014 it completed a restructuring of its €365 million 2000-vintage GMT Communications Partners II after it struggled to sell some of its remaining assets at the end of the fund’s life due in part to the effects of the global financial crisis. Lexington Partners and Newbury Partners bought stakes in that fund and Park Hill advised on the process, as Secondaries Investor reported at the time. Fund II’s failure to meet its hurdle rate meant the fund had to pay some of its proceeds back to investors.

GMT is seeking €400 million for GMT Communications Partners IV which launched in 2013, according to PEI data.

DB Private Equity has invested in at least two other restructurings over the past seven months. In October 2016, it bought a large number of stakes in Zurmount Madison’s SFr250 million ($253 million; €231 million) 2007-vintage fund in a deal involving around SFr74 million of net asset value, as Secondaries Investor reported. In February Deutsche’s private equity unit also closed a deal to restructure healthcare-focused Enhanced Equity Funds’ two vehicles. The deal involved around $200 million of net asset value in its 2005- and 2010-vintage funds as well as follow-on capital.

GMT Communications Partners has been investing in European media content, communications infrastructure and tech-enabled services companies since 1993. It has €775 million in assets under management, according to PEI data.

DB Private Equity, EIF and GMT Communications Partners declined to comment.

Click here to read sister publication Private Equity International‘s 2014 deal mechanic on GMT’s restructuring of Fund II.