Private equity firm Electra Partners has invested £56 million to acquire a portfolio of funds from a bank.
The five secondary private equity funds are being bought from a bank at what is described as a ‘discount’ to the net asset value. Electra says that it expects to generate ‘strong cash distributions’ over the next few years.
Alex Fortescue, chief investment partner at Electra Partners, comments, ‘Five of Electra’s last six investments have been bank-related assets – we see continued strong deal flow in this area.
‘The portfolio we have acquired is an example of Electra using its flexibility to seek the best risk reward balance within the private equity market with the purchase price representing a discount of the valuation of the underlying assets.’
The transaction represents the second large investment made by the firm this year following its binding offer to purchase a portfolio of UBM’s Data Services businesses for £160 million. Before that, 2012 brought Electra Partners three sizeable acquisitions, including a rescue deal for Peverel, and seven exits.
More on Electra Partners deals:
For the current deal, there are also commitments to the five funds for a further £21 million, funded from cash flow, and a ‘likely’ purchase of a sixth fund for a further £9 million by the end of February.
As of 30 September 2012, Electra Partners had funds under management of £1.3 billion and has an investment mandate of allocations of between £40 million and £100 million in deals up to £300 million enterprise value.
