UPDATE 2-AXA buys $1.9 bln private equity funds from BofA

* Financial terms not disclosed

* Possible uncertainty ahead regarding returns

(Adds industry comments, detail)

By Lionel Laurent and Julien Ponthus

PARIS, April 22 (Reuters) - AXA Private Equity (AXAF.PA) bought a $1.9 billion portfolio of private equity funds from Bank of America (BAC.N), one of the industry's biggest-ever deals and a sign of returning confidence after the crisis.

Terms of the deal were not disclosed, but Vincent Gombault, Axa Private Equity managing director for funds of funds, said the current environment suggested a single-digit percentage discount to the portfolio's net asset value.

"The market today (for good-quality portfolios) is currently in the single-digit range ... below 10 percent to the NAV (net asset value)," Vincent Gombault said on a conference call.

The transaction, involving about 60 funds, appears to be one of the biggest ever on the secondary private equity market by a single buyer.

"It definitely is the largest single-purchaser secondaries deal by miles," Greenpark Capital Chief Executive Marleen Groen told Reuters. "I think this deal shows that a lot of activity has come back into the secondary market."

The deal also suggests that fears of a crippling "wall of debt" due in the next few years are overdone, added Gombault. He expressed confidence that over 80 percent of the assets involved would not face the kind of "difficulties" that would see lending banks take control.

RISK UNCERTAINTY

Despite the impressive size of the deal, getting sizeable returns on these investments will depend on the future of the economic recovery as well as the price paid for the assets.

The fact that the funds acquired by AXA were confirmed at 60 percent funded--meaning 40 percent of committed funds have yet to be invested--suggests more uncertainty ahead, one industry source said.

"It will be quite some time before real cash returns arrive as exits will happen at a slower pace," the source said, adding that 60 percent levels suggested an average of three years of investment, leaving about seven years of funding to go.

And if AXA paid close to par for the funds then it may have paid too much, said the source, estimating the average for secondaries market advisors was closer to around 20 to 30 percent discount to book value.

However, the head of secondary activities in North America for advisory firm Triago-X, Jean-Marc Cuvilly, said the discount cited by AXA was "really in line with the market".

The deal follows AXA Private Equity's recent purchase of French bank Natixis's (CNAT.PA) domestic private equity operations valued at approximately $718 million. [ID:nLDE63J04E]

AXA Private Equity currently has $25 billion assets under management.

"Today we feel the market conditions are right to make acquisitions such as the one we are announcing today," Gombault said in a statement. (Editing by Jon Loades-Carter)