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IPE special report May 2018

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ABP, PGGM to stick with AlpInvest despite Carlyle deal [UPDATED]

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  • ABP, PGGM to stick with AlpInvest despite Carlyle deal [UPDATED]

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NETHERLANDS – Dutch pension funds ABP and PGGM have said they plan to stick with private equity investor AlpInvest despite news that US-based Carlyle Group is to increase its 60% stake to 100%.

In a filing with the US Securities and Exchange Commission (SEC), Carlyle confirmed that it reached an agreement to acquire the remaining stake through the issuance of more than 2.8m new shares, worth approximately €67m, in addition to a €4m cash transaction from AlpInvest's management.

Carlyle said the deal would have no effect on existing arrangements with AlpInvest's previous owners and management team regarding the allocation of carried interest.

APG and PGGM – the asset managers for Dutch schemes ABP and PFZW, respectively – are still AlpInvest's main clients.

ABP said it would stick with AlpInvest because "nothing would change in managing the investment mandates, and we would keep on dealing with the same parties", a spokesman said.

"In 2011, we already set the condition that AlpInvest was not allowed to invest in Carlyle funds," he said.

He added that APG had also started to expand its own private equity team to initiate projects to complement AlpInvest's mandates.

PGGM has also been building its own private equity team to reduce the fees it pays for external managers.

A spokesman at the pension fund said it currently managed its infrastructure investments in-house and hoped to branch out to other private equity investments.

But he also stressed that PGGM's contract with AlpInvest extended to 2015 and would not be changed.

Volkert Doeksen, AlpInvest's chairman, said the company's investment policy – focusing on funds of funds, global mandates, co-investment, secondary investments and mezzanine – would also remain unchanged.

The same goes for the management by AlpInvest's 20 partners, who will continue to make business decisions, he said.

Doeksen added: "I will remain as chairman, while Paul de Klerk is to continue as CFO."

The chairman at AlpInvest said Jacques Chappuis, who will become global head of Carlyle's Business Solutions, would replace Dan D'Aniello on the managing board.

AlpInvest is currently the only unit in Business Solutions, according to Doeksen, who said the aim would be to introduce funds of funds for hedge funds and property investments.

In 2011, Carlyle bought its 60% stake from AlpInvest's initial owners, the €292bn civil service scheme ABP and the €134bn healthcare pension fund PFZW.

At the same time, it entered a joint venture with the management of AlpInvest, which acquired a 40% stake in the private equity house.

AlpInvest, which has approximately 150 employees, returned 8.8% on investments in 2011.

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