US INVESTMENT manager BlackRock is buying Swiss Re’s European private equity arm, marking the second deal for a private equity fund manager in as many days as sellers contend with a new regulatory landscape and tough trading.
Swiss Re’s deal to sell its $7.5bn (£4.8bn) private equity and infrastructure fund of funds business follows hot on the heels of HarbourVest Partners’ agreement to buy Amsterdam-listed private equity fund of funds business Conversus Capital.
Both Swiss Re’s private equity business and Conversus invest in a portfolio of private equity funds from firms like Blackstone, CVC and KKR, which in turn plough that capital into companies via leveraged buyouts and minority investments.
BlackRock said the terms of the all-cash deal were not being disclosed. It expects the deal to be completed by the end of the third quarter and be at best modestly accretive to its 2012 earnings. The deal will see Swiss Re Private Equity Partners (SRPEP), which had $7.5bn in total commitments at 31 May, outsource the management of its investments to BlackRock Private Equity Partners, an arm of its Alternative Investors division, which had $110.4bn in assets at end March.
Swiss Re said in a separate statement that it would continue to hold the underlying investments in SRPEP and plans to make further private equity investments mainly through this platform.
BRPEP head Russell Steenberg will lead the combined unit, while SRPEP chief executive Christian Hinze will join BlackRock as deputy head of the combined business.
City A.M. Reporter