RBS to sell stake in private equity arm for £100 million

Royal Bank of Scotland agreed to sell its minority stake in a private-equity unit to an investor group led by buyout firm Adams Street Partners, according to two people with knowledge of the matter.

The Edinburgh-based bank agreed to sell its stake in RBS Special Opportunities Fund last month in a deal valued at about £100 million (HK$1.3 billion), said the sources. The investor group may provide new capital for transactions, the people said.

RBS, Britain's largest state-owned lender, is the latest bank to divest private-equity holdings to focus on its main businesses as regulators press lenders to bolster their capital. Credit Suisse transferred its buyout unit, DLJ Merchant Banking Partners, to the fund's managers last year, while HSBC hired Campbell Lutyens & Co to look at sale options for its direct investment unit in February.

Spokesmen for RBS and Adams Street, which is based in Chicago, declined to comment.

The bank began the process of spinning off the private-equity fund last year. The unit, which raised £1.1 billion from investors in 2007, takes both debt and equity stakes in British firms, according to its website, and is majority owned by its managers.

RBS, which posted its largest annual loss since 2008 last year, is weighed down by legal bills and risky assets five years after getting the biggest-ever bank bailout.