News & Analysis

HarbourVest in direct secondaries deal with Bridgepoint

An educational material supplier and Germany's leading optical lens maker were among companies transferred in the €400m deal.

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HarbourVest Partners is near to closing a direct secondaries deal involving stakes in London buyout firm Bridgepoint‘s 2005-vintage fund, Secondaries Investor has learned.

The transaction involves stakes in more than four portfolio companies held in Bridgepoint Europe III fund. HarbourVest has backed the deal and is being advised by investment firm Compass Partners International, who will help manage the assets, although Bridgepoint will retain ultimate responsibility for them, according to two sources familiar with the transaction.

“Bridgepoint has transferred its interests in a number of the residual assets in Bridgepoint Europe III to a global institutional investor who is being advised by Compass Partners,” a spokesman for Bridgepoint said in an emailed statement, without naming the buyer. “The transaction is subject to normal competition clearances and is expected to complete shortly.”

The deal, which may close in February, is expected to bring around €400 million to limited partners in Bridgepoint Europe III.

Bloomberg News first reported on the deal.

Deal volume for direct secondaries rose by 21 percent to around $5.5 billion in the first half of 2015, compared with a year earlier, according to Toronto-based Setter Capital. Such transactions are set to increase this year as managers look to liquidate tail-end funds and dispose of their assets, according to industry participants.

Bridgepoint Europe III closed on €2.5 billion in July 2005, according to PEI’s Research and Analytics. The fund had a net internal rate of return (IRR) of 2.3 percent as of 30 June, according to a performance report by the California Public Employees’ Retirement System (CalPERS), an investor in three of Bridgepoint’s funds. The fund’s return multiple was 1.4 x as of 31 December.

Bridgepoint is retaining 20 percent stakes in each of Infinitas Learning and Rodenstock, two of the portfolio companies traded in the deal. The firm acquired Infinitas, which supplies educational material and services to 90,000 schools in six European countries, in 2007 for €774 million, and Rodenstock, a leading German manufacturer of optical lenses, in the same year for an undisclosed sum, according to its website.

HarbourVest and Compass declined to comment.