Bloomberg News

Alcatel-Lucent Said to Offer Stakes of Venture-Capital Funds

November 25, 2011

Nov. 16 (Bloomberg) -- Alcatel-Lucent, France’s largest telecommunications equipment supplier, is selling stakes in some older venture-capital funds from its corporate pension plan, according to two people familiar with the matter.

The holdings, many of which date to 1999 and 2000, are valued at about $400 million, according to the people, who asked not to be identified because the information is private. Among the stakes being offered are those in funds sponsored by New Enterprise Associates and Sofinnova Ventures Inc., the people said.

The sale is one of several involving so-called tail-end funds, or those nearing expiration, to reach the market this year. Bank of America Corp. in July offered a collection of holdings composed mainly of U.S. buyout funds with an average vintage year of 2000.

Denise Panyik-Dale, a spokeswoman for the Paris-based company, declined to comment on the deal. UBS AG is acting as intermediary for the sale, the people said.

During the first half of the year, the secondary private- equity market was split between sales of tail-end holdings made up of many small positions in older funds and sales of larger, newer positions by pensions and financial institutions, according to a report from Cogent Partners, a New York-based advisory firm. The older holdings typically sell for steeper discounts than those of more recent vintage.

“The first six months of the year also saw numerous sales of tail-end portfolios from sellers looking to complete administrative clean-ups of their portfolios,” Cogent said in a separate report.

Venture-capital funds on average are receiving lower bids than buyout strategies. The average high bid for venture funds was 79 cents on the dollar in the first six months of the year, compared with 87 cents for buyout funds, according to the Cogent report.

--Editors: Steven Crabill, Josh Friedman

To contact the reporter on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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