French flavour for AXA PE’s €510m spin-off

French family offices and Credit Mutuel stepped in as international bidders grew cold on AXA PE.

AXA Private Equity (AXA PE) has announced its much-vaunted spin-out from its parent, insurance group AXA Group, last Friday, after about a year-and-a-half of negotiations. The deal values AXA PE at €510 million, including debt.
The spin-out will see AXA Group remain a shareholder in the business with a 27 percent stake, and retain commitments to AXA PE’s funds totalling €4.8 billion between 2014 and 2018. The majority of AXA PE (40 percent) will be owned by its employees, with the lion’s share to be owned by top management and the remainder to be opened to AXA PE’s 298 employees. The remaining 33 percent of AXA PE is now in the hands of external investors.
The latter grouping, however, did not end up having quite the international flavour AXA PE initially sought. At different points in the transaction, bidders including Canada’s Caisse de depot et placement du Quebec (the Caisse), the Government of Singapore Investment Corporation (GIC), US pension funds and Middle Eastern sovereign wealth funds all expressed interest in acquiring a stake in the private equity firm.
Why, ultimately, they chose not to, varies with the telling. Sources familiar with the process told Infrastructure Investor many of these international investors got cold feet over the new French government’s perceived hostility to business and taxation issues. 
AXA PE head Dominique Senequier told the Financial Times the Caisse and GIC ended up not investing due to conflicts of interest. “They have come to realise recently that there are conflicts of interest in being a shareholder in the management company and an investor in its funds,” Senequier said.
In the end, the 33 percent stake sold to external investors ended up in the hands of French bank Credit Mutuel and at least two French family offices, sources said.
AXA Investment Management, the AXA Group subsidiary to which the private equity firm essentially belonged, will book €488 million in proceeds from the sale. This will be divided into an up-front payment of about €348 million and deferred consideration of up to €140 million. 
The spin-out is due to officially close later this year.
*Oliver Smiddy contributed to this report.