Abbey: asset sale

Abbey sells private equity portfolio to Coller Capital.

Abbey National plc (“Abbey”) has reached an agreement to sell its interests in 41 private equity funds, together with direct shareholdings in 16 private European companies, to Coller Capital’s latest global secondaries fund (Coller International Partners IV).1 Abbey’s original commitment to the funds involved was GBP £748m (US $1.33bn), of which £162m (US $290m) represents funding commitments as yet un-drawn as at 31st December 2003.

The deal is subject to the approval of the general partners of the funds involved and Abbey expects the transfer of its interests to Coller Capital to be completed within the next few months. The sale price represents a £59m (US $105m) discount to the holding value (net of provisions and prior capital returns) of these funds in Abbey’s balance sheet as at 30th September 2003. The purchase consideration is cash plus a secured loan note with £165m (US $286m) principal amount.

The sale represents the majority of Abbey’s remaining private equity portfolio and is a further move forward in Abbey’s strategy of focusing solely on providing personal financial services in the UK, announced at its annual results in February 2003.

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This sale, the largest secondary purchase of private equity assets ever made by a single buyer, is evidence of the increasingly mainstream role that secondaries are playing in providing portfolio liquidity to the private equity marketplace. Abbey is typical of the new breed of sophisticated seller in the secondaries market – an investor with a high-quality private equity portfolio from which it decides to exit in due course." Anna Merrick, Director of Special Finance at Abbey, said: "This is a fair deal for Abbey, at a price in line with our expectations, and is another step in disposing of assets that are no longer core to our strategy.

Jeremy Coller
Chief Investment Officer and Managing Partner