SWFs to take stake in Apax

Apax Partners, the UK private equity firm originally founded by Sir Ronald Cohen, is in advanced negotiations with three sovereign wealth funds to sell a 10 percent stake in itself. The three prospective investors are The Australia Government Future Fund, the Government of Singapore Investment Corporation (GIC) and Japanese financial services group Takefuji Corp. The deal, first reported in UK newspaper The Times, would reportedly value Apax at around £1.5 billion ($2.8 billion; €1.9 billion).
A source close to the situation told sister news site PrivateEquityOnline that negotiations are ongoing and that it was impossible to say when a successful outcome would be reached. Apax declined to comment on the reports.
The Australia Government Future Fund is a A$60 billion ($52 billion; €35 billion) investment fund, set up in 2006 with the aim of financing future civil service pension liabilities. The acquisition of the stake in Apax would represent a distinct shift in the fund’s portfolio mix. At the end of the last quarter, it was 18.9 percent invested in international equities, 8.6 percent in Australian equities and 67.4 percent of its assets were still in cash, with a negligible amount dedicated to private equity.
GIC is the largest sovereign wealth fund in Asia with assets totaling around $330 billion. It is an active investor in Western financial services companies, having spent a total of $18 billion buying stakes in UBS and Citigroup since December 2007. GIC may also commit $2 billion to $3 billion in capital to TPG’s new $6 billion vehicle dedicated to troubled companies, according to the Financial Times, citing sources close to the matter. GIC will serve as lead investor for the fund, after committing a reported $1.5 billion in December of last year to the firm’s $15 billion mega fund that has yet to close.
Stephen Schwarzman, The Blackstone Group’s chairman and chief executive, defended sovereign wealth funds as “model investors” at January’s World Economic Forum in Davos, after China’s Government Investment Corporation bought a 9.9 percent stake in Blackstone for $3 billion ahead of the firm’s initial public listing in June 2007. In July 2007 the Abu Dhabi Investment Authority acquired an undisclosed stake in US group Apollo Management.
The government of Abu Dhabi also acquired a 7.5 percent stake in The Carlyle Group.