Banks to sell Discovery fund for €400M

Portugal’s banks are continuing to improve their balance sheets – this time by selling off the stakes they hold in the tourism development fund Discovery.

The fund is managed by asset management company Explorer, which in turn manages around 40 other assets in Portugal, which includes the Six Senses Douro Valley and the Eden Resort, the latter in the Algarve.
These investment fund units have been valued at over €400 million by the banks themselves and the banks that hold a stake in them are BCP, Novo Banco, Caixa and Oitante, a company set up by the Bank of Portugal to manage the assets of the Madeira-based bank Banif which was wound up in 2016.
The Discovery Fund has liquid assets worth €850 million. The fund’s senior partner is Pedro Seabra who joined Explorer Investments in 2012 and managed the fund until the end of 2017. Since then he has been responsible for investments and disinvestments in this business area including EREF (2017) and Penha Longa (2018).
Explorer is a leader in Portugal in private equity and is responsible for the management of different asset classes.
It currently manages and advices on funds with assets of over €1.3Bn divided into four business areas: Private Equity, Expansion Capital, Real Estate and Tourism.
The liquidation of the fund is taking place at a time when financial institutions are selling the restructuring funds of ESC which was founded in 2006 by António de Sousa and Fernando Esmeraldo.
ESC, a venture capital and restructuring fund, is also a market leader in Portugal in private equity management.
The funds managed by ESC locate, structure and carry out investments in companies that have a high growth potential, and are involved in restructuring companies which have a long term economic potential.
The focus of these investments are in capital expansion, management buy-ins, management buy-outs, buy-and-build and restructuring. The investors in the funds managed and advised by ECS include international and Iberian financial institutions (banks), the Portuguese state and private investors.
The sale of these ESC restructuring funds which is already at an advanced phase, could make around €1Bn.
In this sale process, which is being headed by the investment firm Holihan Lokey, the banks – BCP, Novo Banco, Caixa Geral de Depósitos and the vehicle Oitante are selling their unit shares that they hold in the Explorer fund, which is now being run by Elizabeth Rothfield, and will continue to manage the assets after the transaction has been made.
In the case of ECS, the sale involves the restructuring funds and the asset management company itself.