A European private equity group backed by the buyout arms of Goldman Sachs and Deutsche Bank has launched after months of delay, underlining the slow post-crisis clean-up of Greek banks.
Stage Capital, the former private equity arm of the National Bank of Greece, opened its doors as an independent group on Monday, after its management and funds managed by Goldman and Deutsche paid €288m to acquire it from the Greek bank.
The creation of the firm, which will manage €300m in assets across 11 different long-term vehicles, is one of the most complex transactions in a growing second-hand market for stakes in private equity funds.
NBG, which has had to sell assets to raise capital after receiving multiple bailouts in Greece’s debt crisis, was first approached by the two banks about selling the unit a year and a half ago and terms were signed early this year.
But the deal has required months of work on buying out each underlying fund and obtaining approvals, including from regulators and competition authorities. Funds typically lock up investors’ capital for several years when they are first raised, making transfers of control difficult.
“It has taken a long time,” Graham Thomas, Stage Capital’s managing partner and chief executive, said. “The deal was signed at the end of January. It’s a relief to be finally there.”
Investors in private equity have turned increasingly to such secondary deals to boost their returns and diversify their portfolios, as fundraising for buyouts has become more competitive and pricey.
Secondary buyers may also feel more comfortable about predicting the future performance of a fund which is halfway through investing in companies than a newly-raised vehicle.
As more capital has flowed into this secondary market, some investors have turned to arranging more specialised deals, such as creating new firms.
“In the secondary business, the more experienced players are focusing more and more on these complex transactions,” Mr Thomas said. “We hope we have reached a fair price.”
Mr Thomas said Stage Capital had “quite a seasoned portfolio”, including holdings in a Scotland-based oil services firm, Czech warehouses, and venture capital investments in medical technology.
The firm plans to focus for the next couple of years on developing its current investments with the capital provided by the Goldman-Deutsche transaction and then selling them, Mr Thomas said.
He added that Stage Capital could target other secondary investments in future. “We’ve now driven a pretty complicated secondary transaction,” he said.