Duke Street investors to cash out of pre-crash fund

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Duke Street’s sixth fund houses investments including the restaurant chain Wagamama

Edi Truell, one of the firm’s founders who left the firm before the fund was raised, has expressed an interest, according to one person familiar with the process.

Duke Street raised the €963 million fund, its largest ever vehicle, in 2006 before the financial crisis hit. But a decade on, the fund has struggled to make realisations and battled poor performance.

The vehicle still holds a number of companies in its portfolio, including Japanese restaurant chain Wagamama and discount retailer The Original Factory Shop. Private Equity News reported in May 2013 that the fund was a “lower quartile” performer.

The firm also aborted attempts to raise a seventh vehicle in 2012 amid a difficult fundraising market, opting instead to adopt a deal-by-deal model.

In an effort to help investors seeking to exit their investments and looking to improve their liquidity, Duke Street has appointed Lazard to provide strategic advice to investors in the fund, according to a person familiar with the matter.

Following the appointment of Lazard, a number of investors in the fund have decided to cash out their investments, the person added.

After Lazard’s advice Duke Street has kicked off a sales process to sell off stakes in the fund, which has so far drawn interest from potential suitors including a number of secondaries firms – which buy stakes in old private equity funds – the person continued.

The auction is expected to close within “a couple of months”, the person said.

The firm’s founder, Truell, has expressed an interest in buying a stake in the fund, another person familiar with the matter said. It is unclear as to whether he has submitted an offer but the same person said Truell is willing to pay investors a premium for the assets over and above what other bidders are prepared to offer. However one person said Truell is not at present formally part of the sale process run by Lazard.

This is not the first time that Duke Street has attempted to sell stakes in its last, decade-old buyout fund. The firm appointed Canaccord Genuity to run a process to market one-third of the investors’ interests in the fund in May 2013, Private Equity News previously reported.

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