Warburg Pincus Eyes Exits Post $6 Billion Neiman Marcus Sale

Warburg Pincus LLC, the private equity firm that posted a 150 percent profit from selling luxury-goods retailer Neiman Marcus Inc., plans to exit more investments as market liquidity returns and asset prices rise.

Warburg is looking at “a number of exits” through share sales, trade sales or merger and acquisition deals, Joseph Landy, co-president of the New York-based company, said in an interview in Abu Dhabi today.

“It’s a good time to sell portfolio companies,” Landy, 52, said. “There are a lot of businesses that have reached maturity for us to consider exits.”

Warburg and TPG Capital, led by financier David Bonderman, will pocket about $2.75 billion from the $6 billion sale of Neiman Marcus to Ares Management LLC and the Canadian Pension Plan Investment Board, two people aware of the matter said last month. Warburg may return $12 billion to investors this year as “capital markets open up” and the firm exits investments via share sales and sales to strategic buyers, said Landy.

“We’re seeing incredible liquidity return to the markets and that liquidity is pushing up valuations on a number of deals that we’re seeing,” he said. “On a global basis, everything feels very expensive at the moment.”

The company has returned $10 billion to investors this year, after returning about $6 billion in the last two quarters of 2012, which was “a significant hike” on other years, Landy said.

On Cards

“I think $12 billion is on the cards by the end of the year but it depends on a couple of things happening before year end,” he said.

Antero Resources Corp., the natural-gas company backed by Warburg Pincus, plans to raise as much as $1.26 billion in a U.S. initial public offering, it said last month. Warburg-backed Endurance International Group Holdings Inc., a maker of Internet-hosting services for small- and medium-sized businesses, is seeking $400 million in a share sale, it said last month.

Warburg in May raised $11.2 billion for its global Private Equity XI LP fund, one of the largest funds since the financial crisis.

“About 20 percent of the fund has been deployed,” Landy said. “We started investing after the first close about 16 months ago. The pace has been average, not white-hot.”

Landy said fundraising is “getting easier” and he expects “a lot more capital” to flow into private equity next year.

Last year, the firm invested more than $2.3 billion in 28 new companies and made follow-on investments in several others.

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