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US private equity firm General Atlantic is in talks to acquire infrastructure fund manager Actis as it seeks to diversify and add assets ahead of an expected initial public offering, according to four people with knowledge of the plans.
The deal, which would add $12.7bn to General Atlantic’s $77bn assets under management, has yet to be finalised and could still fall apart, the people cautioned. General Atlantic and Actis declined to comment.
The move would mark the latest in a series of acquisitions by larger private equity groups seeking to boost their fee-paying assets and widen the array of investment strategies they offer, as fundraising has become more difficult and investors concentrate their bets on a smaller group of asset managers.
Best known for backing fast-growing technology and consumer companies such as Alibaba and Joe & the Juice, General Atlantic has recently sought to broaden its offerings beyond its flagship growth equity strategy.
In April, the New York firm bought Iron Park, a private credit fund manager. It acquired a stake in Clipway, which buys second-hand investor stakes in private equity funds — or secondaries.
The talks come as General Atlantic has filed confidentially for an initial public offering, the FT reported earlier this month.
Were it to decide to press ahead with a public offering, General Atlantic would be following in the footsteps of larger groups such as Blackstone, KKR and Apollo, all of whose stock has performed strongly this year.
Other large, privately held groups including CVC Capital Partners have also considered going public, although the European firm has recently shelved its plans because of volatile market conditions.
Actis executives, who have expanded the business since spinning out of the UK government’s development finance unit in 2004, are likely to net a big windfall by selling their firm.
The spinout at the time attracted criticism for short-changing the UK taxpayer. Its management team bought a 60 per cent stake for £373,000 before acquiring the UK government’s remaining shareholding for £8mn in 2012.
In total, Actis has raised $25bn from limited partners, including $6bn for its most recent sustainable energy fund, closed in 2021.
In September CVC Capital Partners paid €1bn for infrastructure fund manager DIF Capital Partners, which is of a similar size as Actis.
Actis, which began life focused on emerging markets private equity, has expanded into energy and infrastructure, leading deals including a $500mn investment in a Japan-focused renewables operator earlier this year.
With 17 offices in cities ranging from Mexico to Seoul, it has also made big bets on companies including Middle East and Africa focused solar business Yellow Door Energy and Rezolv, which manages wind projects in central and southeastern Europe.
General Atlantic has prioritised growth in so-called sustainable investments, naming co-president Gabriel Caillaux as head of its climate-related strategy. This has raised $3.6bn for its first such fund so far.
Caillaux is one of the General Atlantic executives spearheading the negotiations with Actis, according to one of the people with knowledge of the talks.
The deal would help Actis gain access to General Atlantic’s investor base and boost fundraising at a time when many firms were finding life difficult to raise new money, another person said.
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