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Private Equity House Expands Ownership Stake In Avaloq To 45 Per Cent

Tom Burroughes Group Editor 20 November 2017

Private Equity House Expands Ownership Stake In Avaloq To 45 Per Cent

Warburg Pincus increases its stake in the technology business.

Warburg Pincus, the private equity firm is widening its ownership stake in Avaloq, the Switzerland-based banking and wealth management technology firm working in a number of regions, including Asia. 

The investment house is buying Raiffeisen Switzerland’s 10 per cent stake in Avaloq. In addition, Avaloq has agreed in principle to acquire the remaining 51 per cent of the joint venture ARIZON from Raiffeisen Switzerland as per 1 January 2019 and take full ownership in Arizon. Furthermore, as part of the proposed transaction, ARIZON will enter into a service agreement with Raiffeisen running until the end of 2024, a statement from Avaloq said late last week. 

The move by Warburg Pincus means it has raised its stake in Avaloq to 45 per cent. Avaloq’s employees, management, board of directors and group CEO, chairman of the board and founder Francisco Fernandez will remain the majority shareholders in Avaloq. Detailed financial terms are not being disclosed.

As far as the ARIZON transaction is concerned, that firm will enter into a service agreement with Raiffeisen through the end of 2024 to develop the banking platform and deliver processing services. Some 255 Raiffeisen banks in Switzerland will be migrated to the universal banking platform developed and operated by ARIZON.

Avaloq’s CEO was recently reported as saying that the firm intends to float on the stock market, possibly in Hong Kong, as part of global expansion. It plans to expand further in Hong Kong, mainland China and the US in coming years, Francisco Fernandez told the South China Morning Post in late October.


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