UPDATE 2-AXA private equity raises $8 bln for bank asset buys - Reuters UK
* Expects $40-$50 billion of bank assets to come to market
* Raises largest specialist secondaries fund at $7.1 mln
* Initially targeted $3.5 billion
* AXA earlier bought portfolios from Citi, Barclays (Adds quote)
By Douwe Miedema and Simon Meads
LONDON, June 18 (Reuters) - AXA Private Equity has raised a larger than expected $8 billion from investors, much of which it will use to take assets off the hands of banks cutting down their exposure in the face of growing pressure from regulators.
Banks, which urgently need to fortify their capital buffers, are in a rush to offload private equity assets they spent billions on in the heady days before the financial crisis, causing a flurry in so-called secondary sales.
"AXA Private Equity predicts a significant increase in activity in the secondary market over the next two years," the investment arm of French insurance group Axa, said in a statement on Monday.
The firm expects between $40 billion and $50 billion of bank assets to come up as a result.
New rules for capital known as Basel III make it much more costly for banks to hold risky assets, and they need to free up all the capital they can to support profits in their core lending and investment banking businesses.
Private equity portfolios - which expose the banks to any weakness in the companies that are part of them - are among the assets requiring higher capital buffers, making them an obvious target to shed for many banks.
Axa Private Equity had initially been after some $3.5 billion for its fund but ended up raising more than double that amount at $7.1 billion. An additional $900 million will go towards its primary fund of funds, the group said.
Traditionally, private equity houses buy companies with large amounts of debt financing. They then aggressively cut costs, improve performance, and sell it on for a profit, usually through a stock market flotation.
If they find no outside buyers, they often flip assets between rivals. The model for AXA Private Equity's secondaries fund is slightly different in that it takes investment portfolios off the hands of banks.
Last year, AXA bought a $740 million portfolio of private equity holdings from Barclays and earlier acquired a bumper $1.7 billion portfolio from Citigroup.
Its fundraising success follows U.S. Group Lexington Capital, which last year raised $7 billion, then the largest ever fund raised by a secondaries specialist. Rival Coller Capital is seeking to raise some $5 billion.
"The banks continue to sell ... There is no lack of dealflow, and there is no lack of demand for that dealflow," said Thomas Liaudet, partner at private equity advisory firm Campbell Lutyens.
BIG DEALS VANISH
Deal-making in the private equity industry - once home to conspicuous multi-billion deals such as KKR's 11 billion pound ($17 billion) acquisition of Alliance Boots and Terra Firma's 4 billion pound purchase of EMI - has been tepid ever since the onset of the financial crisis.
In the absence of finding new deals, as bank lending for the debt-heavy leveraged buy-outs has dried up, many firms have spent more of their time buying mid-sized companies from rivals. May saw a flurry of such deals.
Silver Lake and Partners Group bought Swiss tax-free shopping business Global Blue from rival Equistone, while two private equity groups are in the hunt for Europe's biggest frozen food company Iglo Group, now owned by buy-out firm Permira.
The former head of Britain's biggest mobile phone company Everything Everywhere approached private equity groups six months ago about an 8 billion pound buyout, but found no takers, sources said this weekend.
Not only have buy-out firms lost their access to funding, it is also harder for them to sell companies to stock markets, which are virtually shut for new entrants because of the weak global economy and the euro zone debt crisis.
The owners of German chemical company Evonik, for instance, are set to scrap plans for what could have been Europe's biggest initial public offering in more than a year, people familiar with the matter told Reuters on Sunday ($1 = 0.6393 British pounds) (Editing by Hans-Juergen Peters)
England look to Rooney for last eight berth - Football
Published: 18 Jun 2012 - 11:48:25
England hope the entrance of Wayne Rooney will seal the exit of Ukraine as Roy Hodgson's side aim to wrap up qualification for the Euro 2012 quarter-finals on Tuesday.
A 3-2 victory over Sweden on Friday has sent confidence coursing through English ranks, with goals scored by Andy Carroll, Theo Walcott and Danny Welbeck suddenly giving Hodgson a range of options in attack.
But it is the return of Rooney from suspension that will give England an extra jolt of optimism as they seek the point they need to clinch a place in the last eight at Donetsk's Donbass Arena.
A fully-fit Rooney is champing at the bit to enter the fray after serving his two-match ban for being sent off in England's final qualifier last year.
"Obviously I'm delighted to be back part of the team and the squad and to be involved again," the Manchester United star said Sunday.
"The lads have done great to put us in the position we are in now and hopefully I'll get a chance to play and try and shine and help us get through the group."
Rooney has ruled out England playing for a draw despite the fact that a point would be enough to secure their passage to the last eight.
"The same as the first two games, we'll go into the game wanting to win and wanting the three points," he said.
"If we have to take a point then we'll happily do that, but we're going into the game trying to get the three points."
Rooney is also convinced England have the ability to mount a successful challenge at the Euros.
"I think we're good enough (to win it)," Rooney said.
"We've got the players to. I know, obviously, everyone doesn't want us to build up expectations but I firmly believe that we've got the players.
"Obviously, you need a bit of luck as well but I believe we've got a good opportunity. We've always believed."
England's preparations suffered a setback late Sunday after it emerged that Walcott, who had been strongly tipped to replace James Milner in the starting line-up, had pulled up in training with a hamstring problem.
"Unfortunately Theo had a slight setback in training, and that's the major concern with him," Hodgson said.
"He felt the hamstring that, of course, kept him out for so long at the end of last season and we were slightly concerned about that when he came to us. But we've been lucky that nothing occurred with that (since then)."
Hodgson meanwhile is confident his team will be able to cope with an intimidating atmosphere in Donetsk.
Hodgson believes England will benefit from the experience of last Friday in Kiev, where an estimated 20,000 Swedish fans drowned out England's smaller band of around 4,000 supporters to create a hostile atmosphere.
"We're getting used to playing away from home," Hodgson said. "We've already played in an away game, we have to prepare for another away game.
"That's what happens -- when you get drawn into a pool with the host nation you have to accept you're literally playing away from home."
Ukraine captain Andrei Shevchenko meanwhile said the hosts would have to raise their game after the bubble of euphoria created by their opening win over Sweden was punctured so clinically in last Friday's 2-0 defeat to France.
"We knew it was a very difficult game and the French played really well, especially in the second half. But we still have a chance," Shevchenko said.
"We know that if we can beat England we'll qualify for the knockout stage. (But) we'll have to play much better than we did against France if we want to beat England. They are definitely one of the most dangerous teams here.
"They had a good result against France and they beat Sweden, so they've had a great start. Home advantage helps us a lot."
Shevchenko, who faces a late fitness test on Monday after damaging a knee in training, also warned his side against focusing excessively on the threat posed by the returning Rooney.
"I know he's a very good player and someone who can change the team," Shevchenko said.
"But the whole England team is very good. They are most dangerous from set-pieces, corners and free-kicks. We will have to watch that."
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