Partners Group seals largest European direct deal to date

Foncia provides services to residential property owners and tenants

The Swiss alternatives firm – in partnership with Canadian fund manager Caisse de dépôt et placement du Québec and the China Investment Corporation – has agreed to purchase Foncia from European private equity firms Bridgepoint and Eurazeo for €1.8 billion, Partners said in a statement.

For Eurazeo and Bridgepoint, which invested in the company in 2011, the sale has generated a return multiple of 2.4. The net return for the two firms amounts to around €1.13 million after tax, transaction costs and the acquisition debt repayment, according to a Bridgepoint and Eurazeo statement.

Paris-based Foncia provides a range of services to residential property owners and tenants, including joint property management, lease management and rental and transaction services. It has a network of over 500 branches and manages a portfolio of more than 1.8 million properties across France, Belgium, Switzerland and Germany. It employs more than 8,000 people and generated revenues of around €700 million in 2015.

The deal is Partners Group’s largest European direct investment to date, according to a spokeswoman for the firm. It will make the investment using capital from its 2012 vintage private equity direct investment programme, which closed at its hard cap of €1.5 billion in February 2014, as well as other funds, she added.

The alternatives manager, which has historically mainly invested through private equity funds, has shifted the way it deploys its capital in recent years by investing directly into companies. It now invests around 60% of its capital directly, up from approximately 14% in 2009, as previously reported by sister publication Private Equity News. Direct investing allows firms to bypass the high fees that private equity firms charge.

Partners Group typically targets direct investments in companies with enterprise values of between $ 250 million and $ 2 billion, according to the spokeswoman.

Other sizeable direct deals for Partners Group include US-based healthcare provider MultiPlan, in which it invested with Starr Investment Holdings in 2014 in a deal worth $ 4.4 billion. Starr and Partners Group invested about $ 1.4 billion of equity and borrowed the remainder, Private Equity News reported at the time. It sold the company in May 2016 to Hellman & Friedman for about $ 7.5 billion including debt, but retained a minority investment.

In 2014 it also acquired a majority stake in Fermaca, a Mexican provider of gas transportation infrastructure for $ 750 million and added an additional $ 500 million of equity in May 2015 to fund the company’s expansion, she said

China Investment Corporation made the investment in Foncia through a wholly owned subsidiary, CIC Capital Corporation, which was set up in January 2015 and specialises in direct investments, according to CIC’s website.

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