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Deutsche Bank confirms sale of its late-stage private equity portfolio for E1.5bn

Deutsche Bank has confirmed the final sale of its late-stage private equity portfolio through a management buy-out for E1.5bn. It ranks as the largest ever secondary sale of direct investments.

Joseph Ackermann, chairman of Deutsche Bank's group executive committee, said the sale was ‘an important step in reducing the bank's exposure to private equity'.

Ted Virtue, chairman and CEO of DB Capital Partners, and Graham Clempson, European managing partner, were confirmed as the leaders of the buy-out. The acquisition vehicle, MidOcean Partners, was financed by a group of large private equity investors, including Coller Capital.

Virtue said: ‘We are thrilled to have completed the largest secondary purchase of a private equity portfolio and to have formed MidOcean Partners. With the strong support we have received from our investment partners, Deutsche Bank and the management team, we are excited about the opportunity to create value for our stakeholders.'

The other investors included NIB Capital Private Equity, Ontario Teachers' Merchant Bank, CPP Investment Board, HarbourVest Partners, Paul Capital Partners, Bregal, Northwestern Mutual, the Yucaipa Companies and Presidential Life. Deutsche is to retain 20 per cent of the portfolio.

The European portfolio includes Center Parcs and United Biscuits, while in the US principal investments include Jostens and Prestige Brands.

Axel Wieandt, Deutsche's head of corporate development, will take over from Virtue as Deutsche's global head of corporate investments. That unit will now consist of the bank's remaining private equity and venture capital assets, its industrial holdings, third-party private equity fund investments and principal-owned real estate assets.

The completion of the sale, which has been a long time in gestation, may clear the way for a series of other transactions. A number of major banks are in the process of dramatically scaling back their private equity exposure.

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