Structuring issues put brakes on AXA spin-out

The spin-out of AXA Private Equity from its French insurer parent has faltered due to structuring issues, according to sources close to the situation.

AXA Private Equity’s bid to win independence from its parent, French insurer AXA, has hit the buffers with its potential backers raising questions about the proposed deal’s structure.

AXA PE’s management team, led by Dominique Senequier, has courted a number of buyers since news of a spin-out broke in September, before settling on the duo of Canadian pension fund Caisse de Dépot et Placement du Québec and Singapore sovereign fund GIC as partners, sources said.

However, discussions faltered over concerns about the structure of the deal, with one source indicating GIC had ‘got cold feet’.  A source close to AXA PE said the process was still very much ‘live’, however, but had simply slowed.

“These processes take time – Barclays Private Equity took 18 months to spin out, for example – and the parties involved are simply working through issues with the structure,” another source with knowledge of the process said.

Price is not thought to be an issue at this stage, but the size of insurance group AXA’s stake in the independent firm and the quantum of its ongoing commitments to the group’s funds were understood to be key issues that have led to the impasse.

AXA and Caisse de Dépot declined to comment, while GIC could not be reached for comment by press time.