LONDON — British bank HSBC is in talks that could lead to five separate management buyouts of its private equity fund management businesses, it said, as banks go back to focusing on core operations. Europe's biggest bank said talks are expected to lead to spin-offs of its private equity fund management businesses in Hong Kong, Britain, the United States, Canada and the Middle East.
HSBC's regional private equity businesses manage $8.8 billion of assets and focus on supporting management buyouts in Britain, technology investments in Asia, mid-market private equity and mezzanine deals in the US and management buyouts and providing capital for growing businesses in Africa.
HSBC intends to retain its investments of about 20 per cent of the private equity businesses, a spokesman said.
HSBC spun off its bigger European buyouts business in 2003, retaining a minority stake in the firm which subsequently became Montagu Private Equity. Tougher regulation of the banking industry is leading banks to pare back non core activities, such as private equity investing, to focus on core businesses.
The announcement from HSBC follows plans from Barclays to spin off its mid-market buyouts arm this summer ahead of a planned fundraising by the private equity business later in the year. Royal Bank of Scotland is also in talks to sell its European and US private equity funds portfolios. In a separate statement, independently listed vehicle HSBC Infrastructure said the bank had agreed terms to spin off HSBC Specialist Investments. — Reuters