Francisco Fernandez, CEO at Avaloq

Francisco Fernandez, CEO at Avaloq

Private equity (PE) firm Warburg Pincus has acquired a 35% shareholding in Avaloq from existing shareholders – with the deal a first step towards a potential public listing.

The transaction values Avaloq in excess of CHF 1 billion ($1 billion). Detailed financial terms are not being disclosed, but Francisco Fernandez, CEO at Avaloq, retains a 28% shareholding. Management and employees retain an additional 27% shareholding. This completed transaction does not affect the shareholding of the bank Raiffeisen Switzerland, according to Avaloq.

As Banking Technology reported last year, Avaloq was rumoured to be talking to PE firms. Avaloq was one of the very few large banking technology companies remaining in the hands of its founders. Talks about Avaloq’s possible sale have surfaced a number of times over the last decade.

Fernandez says it will use Warburg Pincus’ expertise to “continue our path for capital market readiness”.

Fernandez stays as CEO and also assumes the role of chairman. Jürg Hunziker stays as deputy CEO and group CMO.

Warburg Pincus has a history of investing in finserv and fintech, with over $10 billion invested in over 90 companies in these sectors (nearly 20 of which are banks). These include: AllFunds Bank, Arch Capital, China Huarong Asset Management, FIS/Metavante, HDFC, Interactive Data Corporation, Mellon Bank, Network International, Elavon, Sterling Financial Corp, Santander Consumer USA, Wall Street Systems and Webster Bank.

Along with the transaction, Avaloq is also creating a European advisory board to support its “strategic initiatives and growth”. The board includes Jacques Aigrain, former CEO of Swiss Re and chairman of LCH.Clearnet; Stefano Boccadoro, former general manager of Cassa Lombarda Bank and CEO of Santander Italy; Stefan Krause, former CFO of Deutsche Bank and BMW; and Javier Marin, former CEO of Banco Santander.

This story was originally published on 22 March 2017 with the same headline. Details about the transaction being completed were added.