Groupama plans PE sale, MBOs may arise

French insurer Groupama has put its entire private equity arm up for sale. Quartilium, which is the largest part of the business, committed to three infrastructure funds last year.

According to market sources, management buyouts at Quartilium – the private equity funds of funds arm of French insurance firm Groupama – as well as Acto Capital and ActoMezz, the smaller parts of Groupama's private equity business, may be possible. Other options are also being considered, however.  

The sources confirmed a report in l’Agefi at the end of last week that Groupama is putting its entire private equity operation up for sale. Groupama is understood to be close to appointing an investment bank to advise on the sale.   

The private equity arm has around €1.8 billion of funds under management, of which funds of funds business Quartilium accounts for approximately €1.4 billion. The other two private equity activities are Acto Capital, a direct investor in small buyouts, and ActoMezz, which provides sponsor and sponsorless mezzanine loans.

The sources indicated that the three activities would likely go their own way in future as there are not be believed to be sufficiently strong synergies for them to remain together as one unit. This paves the way for possible management buyouts.

Groupama currently provides around 50 percent of Quartilium’s capital, with the other 50 percent from third parties. It has indicated it would be prepared to support future funds as a third party rather than a sponsor.  

The Quartilium team is headed by Didier Levy-Rueff and has 10 professionals in its investment team, according to its website. Its most recent vehicle – its third in total – is a €340 million, 2007-vintage fund of funds.  It is mainly focused on commitments to private equity funds, although it also targets infrastructure funds. Last year it made commitments to three infrastructure funds being raised by Axa Private Equity, Meridiam Infrastructure and US-based Energy Investors Funds.

The Acto Capital team is seven-strong, according to its website, and headed by Jean-Marc Sceo and Quentin Bergot. The ActoMezz team, also with seven members, is headed by Stephane Bergez.     

The backdrop to the planned sale of the private equity arm is Groupama’s heavy exposure to southern European eurozone markets – including Greece, Italy and Spain – which has stretched its solvency ratio. The firm has already undertaken a number of strategic moves – including the merger of real estate arm Silic with Caisse de Depot’s Icade – in order to bolster its balance sheet. It has also undertaken a capital-raising exercise. 

French insurance giant AXA announced last year that it was undertaking a strategic review of Axa Private Equity, which could result in a sale.