This type of pass-the-parcel deal often takes place just before a firm goes out fund raising. Investors want to see at least some of their capital back before they commit any more money to a fund. So, there's pressure on general partners to find an alternative means of crystallising profits and generating returns, even in an unreceptive market. Transferring assets to another fund is a quick and easy way to do this.
Last year, for example, BC Partners bought private hospital provider General Healthcare from Cinven for e2.1 billion. Cinven had acquired the UK and French healthcare divisions of Compagnie Generale des Eaux (now Vivendi) in 1997. It merged the UK business with Amicus, another healthcare company, before selling it. A firm that has also used this strategy in the past is Doughty Hanson. It is currently in talks with Charterhouse over the sale of Dunlop Standard Aerospace for a...
