Switzerland-based insurance group Swiss Life is finally planning a retreat from private equity following its decision yesterday to appoint Peter Derendinger, a member of the Swiss Life Private Equity board, to head its Swiss Life Private Equity Partners unit.
In doing so, the group has severed its ties with David Salim and Thomas Grotzer, CEO and COO respectively of Swiss Life Private Equity Partners, ‘with immediate effect’. In a statement, Swiss Life said the decision was the result of ‘insurmountable differences of opinion’ between Swiss Life and part of the Swiss Life Private Equity Partners management.
Swiss Life Private Equity Partners is a wholly owned Swiss Life subsidiary specialising in asset management and investment consulting in the private equity sector. The unit also manages Private Equity Holding, the ailing private equity group formerly affiliated with Bank Vontobel.
Swiss Life Private Equity Partners took over management of Private Equity Holding in July 2001, overhauling the firm’s operations. The firm recently completed a re-assessment of the PEH portfolio, which comprises 86 funds and direct investments in 23 companies.
Last month, Swiss Life agreed to extend a SFr325m credit facility beyond its original 10 March expiry date, providing a short-term solution to PEH’s problems.
PEP has SFr3.4bn of assets under management including PEH's assets as well as some SFr460m of assets belonging to the Swiss Life group.
In its most recent report for the year ended 31 March 2002, Private Equity Holding reported a SFr264.9m (E181m) net loss, the result of significant write-downs in its portfolio. The largest write down was for SFr118m, taken on an investment in US Ventures, a US tech investor to which PEH made its largest single commitment in March 2000.
In the three months to 31 December 2002, the fair value per share of Private Equity Holding progressively declined from SFr213.52 to SFr154.60. At the end of March, the fair value had fallen to SFr131.70.