Some of the largest buyout groups in the US and Europe are lining up bids of more than €1.5bn for a French investment manager that has been put up for sale by its British private equity owners.
The planned sale of Primonial, which manages €37bn of assets for investors, comes at a time of consolidation in the asset management industry, driven in part by pressure on fees from the rise of low-cost passive investment funds.
Primonial invests in a number of asset classes, including life insurance and equities, but it has a particular focus on commercial real estate, which has been one of the best performing asset classes in France over recent years.
BC Partners, CVC Capital Partners, Eurazeo and KKR have all expressed an interest in the business, according to multiple people with direct knowledge of the situation.
However, the people also warned that a deal was not guaranteed and its private equity owner Bridgepoint has not yet received formal bids.
Private equity groups are attracted to asset managers like Primonial as they can produce a steady flow of recurring fee income, which can repay loans used to pay for the business. “It’s a steady stream of income,” said the founder of a multibillion-euro asset manager in Europe who is familiar with Primonial.
No date has been set for first bids but the sale process could kick start as early as the summer, a person with direct knowledge of the process said. While some trade rivals might express interest in the business, Primonial is likely to be bought by a private equity group, the same person added.
If a deal is successful, a valuation of over €1.5bn for the business would represent roughly 10 times earnings before interest, tax, depreciation and amortisation, according to two people with knowledge of the company’s finances. It would be one of the largest private equity deals in France since 2014, according to Dealogic.
Bridgepoint, which specialises in buyouts of mid-sized European companies, has owned a majority stake in Primonial for two years, a shorter timeframe than the three-to-five years that buyout groups typically hold assets.
A person with knowledge of the business said Bridgepoint had decided to sell now
because its assets have doubled since the private equity group’s investment.
Acquired by Bridgepoint from a group of French investors in 2017, the Paris-based company has more than 100,000 retail clients and more than 100 institutional clients. “This is a great consolidation platform in a fragmented market,” said a person familiar with its performance. “It has international ambitions,” the person added.
Asset management transactions have been booming according to a PwC report that found the sector has recently seen its highest activity level in almost a decade. Recent deals include the $5.7bn takeover of MassMutual’s OppenheimerFunds by Invesco.
London-based Bridgepoint has appointed bankers at Rothschild and JPMorgan Chase to explore a sale of the business, as first reported by Les Echos. All the private equity groups declined to comment.