Coller Capital bundles private equity stakes in $1 billion securitization

(Bloomberg) -- Coller Capital is assembling a roughly $1 billion structured finance instrument backed by stakes in some of its private capital secondary funds, the firm's second such deal this year, according to people with knowledge of the transaction.

Citigroup Inc. is structuring the so-called collateralized fund obligation, which will include both debt and equity portions, said a separate person who asked not to be named because they're not authorized to speak publicly. Wells Fargo & Co. is helping Citigroup sell the deal to investors, they added.

The securitization is still being put together and details could change, the people said. Representatives for Coller, Citigroup and Wells Fargo declined to comment.

Fund finance products have gained steam this year as private capital firms seek new sources of liquidity now that many are struggling to sell the companies they bought out, or whose buyouts they financed. The instruments are often purchased by insurance companies, which buy the rated portions of the deals as a way to invest in private funds at lower capital charges than if they were to hold the fund interests directly.

Coller last month priced a $2.4 billion securitization that drew investors including Barings and Ares Management Corp. Neuberger Berman Group, Carlyle Group Inc.'s AlpInvest and Thrivent have also done deals in recent months.

(Updates to include Citigroup in second paragraph)

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