Blow for private equity as Candover set to close with sale of assets

PRIVATE equity firm Candover Investments threw in the towel yesterday and said it will wind itself up, becoming one of the industry's highest-profile victims of the credit crunch.

The firm, once a leading player in European buyouts, plans to sell its portfolio of companies and return cash to shareholders after a failed attempt to sell the business last month to a Canadian pension fund.

Candover's complicated structure - with a listed parent that co-invests alongside an independent but wholly-owned fund manager, Candover Partners - lay at the heart of the firm's woes, analysts said.

The firm had been facing months of uncertainty after it closed its €3 billion (2.5bn) flagship fund after its listed partner cancelled a €1bn pledge to invest in the pool. Candover said yesterday there is still significant value in its portfolio, including oil-field services company Expro, which accounts for almost one third of the firm's valuation.

But net asset value (NAV) fell 13 per cent in the six months to the end of June, driven in part by BP's ruptured Macondo well, the world's worst offshore oil spill.

Upgrading Candover to "add", analysts at Oriel said the potential returns to shareholders from the sale of portfolio companies are likely to be well above the current share price.