AXA-led group acquires ING-backed German fund

ING has agreed to sell Steadfast Capital’s €305 million fund to a consortium of private equity investors, but the Dutch insurance company still intends to invest in the Frankfurt-based private equity firm’s next fund.

Dutch insurance conglomerate ING Group has agreed to sell its 100 percent interest in German private equity fund Steadfast Capital Beteiligungen I to an AXA Private Equity-led consortium. Terms of the deal were not disclosed, although an ING press release stated that the sale would have no significant effect on ING Group’s earnings or financial ratios.

In addition to Paris-headquartered direct fund and fund of funds manager AXA Private Equity, which will own an interest in Steadfast I through the AXA Secondary Fund III, Paul Capital Partners and Credit Suisse First Boston Strategic Partners are also among those investors in the buying consortium.

The 2001 vintage, €305 million ($361 million) fund being sold is managed by Frankfurt-based Steadfast Capital, formerly known as BHF Private Equity. Currently, the Steadfast I portfolio includes 16 investments in Germany’s middle market and is managed by a team of seven investment professionals. The team is led by managing partner Nick Money-Kyrle, who was assigned to restructure BHF-Bank’s private equity business in 2000, prior to which he spent time at GE Capital’s German private equity business and at the UK buyout firm 3i Group.

Steadfast typically acquires majority stakes in German middle-market companies, including those in the expansion and buyout stages. Established in September 2001, the Steadfast I fund was originally managed by BHF Private Equity, which was created in 2001 by ING BHF-Bank. When ING sold BHF-Bank to European private bank Sal. Oppenheim jr. & Cie. KGaA last year, ING was left with 100 percent interest in BHF Private Equity.

According to an ING press release, Steadfast Capital is planning to raise its next fund, Steadfast Capital Fund II, in 2006. The fund has a target capitalisation of €200 million to €250 million and will invest in mid-sized companies of Germany, the Netherlands, Austria and Switzerland. ING has agreed to provide €110 million for backing the new fund, while the AXA-led consortium will commit €30 million. The remaining €60 million to €110 million will be raised by Steadfast Capital from new investors.

Both the sale of Steadfast I and and ING’s commitment to Steadfast II are expected to be completed in the first quarter of 2006, subject to regulatory approval.