Axa Private Equity, a unit of French insurer Axa SA, has raised almost $6 billion to buy stakes in buyout funds from existing investors seeking to cut their commitments, said two people with knowledge of the situation.
The company may reach the $5 billion limit of how much capital Axa Secondary Fund V LP can collect and has gathered about $1 billion for co-investments, said the people, who declined to be identified because the matter is private. Separately, Axa Private Equity, based in Paris, is seeking as much as 2.5 billion euros ($3.3 billion) for European leveraged buyouts, the people said.
Axa Private Equity, headed by Dominique Senequier, had initially targeted $3.5 billion for its so-called secondary fund, up from its previous $2.9 billion pool raised in 2006. Last month, faced with growing investor appetite, it requested that the $4 billion limit be lifted to $5 billion, people with knowledge of the matter said then. The firm wants to take advantage of a surge in sellers, including banks and insurers, disposing of assets. Axa Private Equity, which manages $28 billion, began marketing its latest secondary fund in 2010.
Lexington Partners Inc. manages the largest secondary fund at $7 billion. Secondary transactions rose to a record of about $25 billion in 2011 and are projected to stay at that level this year, according to a January report by Cogent Partners, a New York-based advisory firm.
Banks and insurers are selling private-equity portfolios because tighter regulation will make those assets more expensive to hold. Pension funds, including California Public Employees’ Retirement System and Government of Singapore Investment Corp., are also selling private-equity investments as they cut the number of managers they are willing to invest in following the financial crisis.
An official for Axa Private Equity declined to comment.
The firm’s recent purchases include the $1.7 billion acquisition of private-equity funds from Citigroup Inc.