peHUB-Bregal shops $400 mln private equity portfolio

Mon Aug 11, 2014 6:42pm EDT

* More than 20 funds, all pre-2008 vintages

* Evercore Partners is handling sale

* Secondary market remains strong

By Chris Witkowsky

NEW YORK, Aug 11 (Reuters-peHUB) - Bregal Investments is shopping a portfolio of interests in more than 20 private equity funds with a net asset value of about $400 million, according to three people with knowledge of the process. The deal is the latest sign of a strong and growing secondary market for such interests.

The funds, originally backed by fund-of-funds group Bregal Private Equity Partners, are all pre-2008 vintages, according to one of the people. Evercore Partners is running the sales process, a different person said. Executives at Bregal Investments did not respond to a request for comment, while those at Evercore Partners declined to comment.

Private equity, which includes leveraged buyouts and venture capital, is viewed as an illiquid asset class. Investors such as public pensions and endowments typically lock up their money in limited partnerships for 10 years or more.

However, investors looking to get out early can avail themselves of a secondary market for fund interests that has developed over the years. Thanks in part to high offering prices, about $16 billion in deal volume has moved this year on the secondary market, putting it on pace to eclipse last year's $27.5 billion, according to secondaries advisor Cogent Partners.

Other notable sellers on the secondary market this year include GE Capital, which sold a portfolio of fund interests for about $1.3 billion to Ardian; the Abu Dhabi Investment Authority, which has reportedly been in talks with Ardian to sell more than $2 billion of fund stakes, according to Bloomberg; and the Massachusetts Mutual Life Insurance Co., which sold an estimated $250 million portfolio of fund stakes.

It is not clear why Bregal Investments is selling the fund interests. The funds-of-funds group is one of several businesses at Bregal Investments, the private equity arm of COFRA Holdings, a European holding company that is controlled by the wealthy Brenninkmeijer family. Bregal Private Equity Partners is led by managing directors Chuck Flynn in New York and Jan Faber in London.

The other Bregal Investments businesses, which invest directly into companies, include European middle-market group Bregal Capital, North American middle-market group Bregal Partners, Bregal Energy and growth investor Bregal Sagemount. Overall, Bregal Investments has invested or committed about $9 billion, according to its website. (peHUB is a Thomson Reuters publication. Editor: chris.witkowsky@thomsonreuters.com. www.pehub.com)