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Standard Chartered Bank

Standard Chartered spins off private-equity arm, sells investment portfolio to UK asset manager Intermediate Capital

  • The bank has been reducing the size of its private-equity business since 2016, with an eye towards an eventual exit.
  • Bank expects to take a restructuring charge of about US$160 million related to the transaction.
PUBLISHED : Monday, 17 December, 2018, 9:34pm
UPDATED : Monday, 17 December, 2018, 9:34pm

Standard Chartered said on Monday that it would spin off its private-equity business in a management-led buyout and sell most of its private-equity investment portfolio to funds managed by a unit of British asset manager Intermediate Capital Group.

The bank, which is based in London but generates much of its revenue in Asia, has been reducing the size of its private-equity business since 2016, with an eye towards an eventual exit.

Terms of the deal were not released. The transaction is expected to be completed in the first half of 2019.

“The [Standard Chartered Private Equity] team has streamlined the group’s private equity business over the past few years, in line with our stated objectives,” said Simon Cooper, chief executive of corporate, commercial and institutional banking at Standard Chartered. “This transaction will see the group exit the majority of its private equity exposure, and gives the SCPE team an opportunity to pursue an independent future with the backing of ICG Strategic Equity.”

Standard Chartered said that it expects to take a restructuring charge of about US$160 million related to the transaction.

The portfolio consists of investments in 35 companies in China, India, Southeast Asia, South Korea, the Middle East and Africa.

Affirma Capital, a newly formed, independent firm owned by members of the management team of Standard Chartered Private Equity, will manage the portfolio for ICG Strategic Equity, part of Intermediate Capital Group.

Intermediate Capital Group manages about 33.6 billion (HK$297.7 billion) in third-party funds and proprietary capital.

The transaction comes as chief executive Bill Winters has been trying to reassure investors about his efforts to turn around the lender.

Since he joined in May 2015, Winters has overhauled the bank’s executive ranks, cut 15,000 jobs and sold several underperforming businesses.

The bank is expected to unveil its new strategic plan when it reports its annual results in February.

“There’s sort of nothing off the table. I think of this more as a sharpening and an evolution, rather than something that is a complete rebase of our plan,” Andy Halford, the Standard Chartered chief financial officer, said when the company reported its third-quarter results in October.

The bank returned to an annual profit in 2017 after two years of deep losses and posted a 35 per cent profit jump in the third quarter, but some investors have been frustrated with the pace of the turnaround.

Year-to-date, the company’s shares are off 24 per cent in London and 28 per cent in Hong Kong.

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