Strategic Partners acquires tail-end stakes from Hannover RE

The world's third largest reinsurer has offloaded stakes in three buyout funds amid the implementation of Solvency II.

Strategic Partners has acquired stakes in at least five buyout funds from the world’s third largest reinsurer as the regulation governing insurance firms’ exposure to assets such as private equity comes into force.

The Blackstone unit bought interests in Equistone Partners Europe Fund II, Equistone Partners Europe Fund III, Charterhouse Capital Partners VIII, Industri Kapital 2004 and Industri Kapital 2007 from Hannover RE, a spokesman from the German insurance firm confirmed to Secondaries Investor.

UK regulatory filings show Strategic Partners used its Strategic Partners VI Investments vehicle to acquire the interests.

Solvency II, the EU regulatory framework that governs how much capital insurance companies must hold against particular assets, came into effect on 1 January and had already started to spur dealflow last year, according to industry participants.

It was not clear if Hannover RE sold its stakes to comply with the regulations.

Equistone Partners Europe Fund II is an €888 million vehicle that closed above its €750 million target in February 2005 after five months of fundraising, according to PEI’s Research and Analytics. Portfolio companies held in the fund include Eschenbach Optik, a German eye-care specialist and Jerrold Holdings, a UK residential and semi-commercial term lender.

Equistone Partners Europe Fund III is a 2007-vintage €1.8 billion fund that focuses on buyout opportunities in UK, France and Germany. Last July, Equistone sold French aluminium maker La Toulousaine, which it had held in Fund III, to mezzanine debt powerhouse Intermediate Capital Group, making a reported 3x return.

Charterhouse Capital Partners VIII is a 2006-vintage €4 billion vehicle that is managed by London buyout firm Charterhouse Capital Partners. The fund holds three key assets including UK financial services firm Acromas, catering company Elior and healthcare equipment maker Tunstall, according to a filing with the London Stock Exchange.

IK 2004 and IK 2007 are €825 million and €1.7 billion funds focusing on western Europe and the Nordics. IK 2004 holds 12 portfolio companies and IK 2007 holds 17 assets, according to manager IK Investment Partners‘ website. IK was the most in-demand European mid-market leveraged buyout manager on the secondaries market in the third quarter of 2015, according to a survey by advisory firm Setter Capital.

Up to 2 percent of Hannover RE’s €37.7 billion in assets under management is allocated to private equity, according to the spokesman.

Strategic Partners and IK Investment declined to comment. Equistone and Charterhouse did not return requests for comment.