News & Analysis

JZ doubles money on online bank

The sale of Fidor comes after the firm offloaded six European assets earlier in the year in a direct secondaries transaction worth €96m.

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JZ Capital Partners, a London-listed private equity firm, has sold German internet bank Fidor to Groupe BPCE, the second largest banking group in France.

Investors in the EuroMicrocap Fund 2010 will make nearly double their invested capital on the deal. Fidor was one of the remaining assets in the fund after it completed a direct secondaries transaction in February that saw it offload six European businesses – four at an uplift to cost, and two at a discount – to an unnamed “major financial institution”.

JZ Capital Partners’ total proceeds from the secondaries sale were €96.3 million.

JZ Capital Partners is a listed fund that makes commitments to a family of funds managed by Jordan/Zalaznick Advisers, a firm led by New York-based duo David Zalaznick and Jay Jordan. The listed fund had a market cap of £371 million ($489 million; €437 million) as of 1 August, representing a large discount to its net asset value, which was $874 million according to its June 2016 monthly update.

As a limited partner in EuroMicrocap Fund 2010, JZ Capital Partners invested a total of $18.4 million in Fidor in 2013 and expects to receive around $34.3 million in proceeds from the sale.

Founded in 2009, Fidor Bank is one of a new generation of innovative retail banks that is entirely digital and leans on its 350,000 “community members” to actively participate in the bank’s decision-making processes. It offers retail and business banking products and currently has around 100,000 customers. The group also creates fintech applications that are used by other banking groups; Telefonica recently launched O2 Banking, its mobile-only bank account, using Fidor infrastructure.

The buyer – Groupe BPCE – said in a statement that the acquisition is in line with its strategic plan, entitled “Another Way to Grow”, and will help accelerate the rollout of the group’s digital strategy.

In January Jordan/Zalaznick Advisers raised its third EuroMicrocap Fund, with total commitments of €400 million. €75 million came from the listed entity JZ Capital Partners, a further €25 million from the firm founders and European investment team and the remaining €300 million from third party institutional investors.