Exclusive-Alter Domus owners pursue stake sale in fund administrator –sources

By Pablo Mayo Cerqueiro and Amy-Jo Crowley

LONDON (Reuters) – The owners of fund administrator Alter Domus are pursuing the sale of a stake in the Luxembourg-based group that could value it at more than 4 billion euros ($4.4 billion), three people familiar with the matter told Reuters.

The shareholders, which include the company’s founders and buyout firm Permira, have been working with bankers at Goldman Sachs and Raymond James to gauge interest in the business, said the people, who spoke on condition of anonymity.

Indicative offers are due in mid-December, they said.

However, the structure of the deal has not been decided and could result in the sale of either a minority or majority stake, the people added.

Alter Domus offers back office services to private capital funds, such as fund accounting and reporting, and oversees around $2 trillion in client assets.

Permira holds around 34% of the shares of Alter Domus after investing in the business in 2017, with a group of individuals, including the company’s founders, owning the rest, according to the fund administrator’s latest annual report.

Permira, Alter Domus, Goldman Sachs and Raymond James all declined to comment.

Alter Domus shareholders were reported in June 2022 to have held initial discussions with potential buyers, but a deal never materialised as soaring borrowing costs and market volatility rocked the deals market.

They have now revived the sale process, inviting private equity funds to bid for the business, the people said.

Last year, the business posted underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of close to 170 million euros, a 15% jump from 2021.

It is on track to post EBITDA well in excess of 200 million euros and could fetch a multiple of more than 20 times core earnings, two of the people said.

Private equity firms find fund administrators attractive investments because they provide predictable income streams and ability to grow via debt-fueled acquisitions.

Earlier this year, Reuters reported that buyout group Thomas H. Lee Partners had clinched a deal to invest in U.S. fund administrator Standish Management.

($1 = 0.9112 euros)

(Reporting by Pablo Mayo Cerqueiro and Amy-Jo Crowley in London; Additional reporting by Emma-Victoria Farr in Frankfurt; Editing by Anousha Sakoui and Tomasz Janowski)