London. Standard Chartered PLC (the Group) has agreed terms for the spin out of its private equity business and a sale of the majority of its private equity investment portfolio to funds managed by ICG Strategic Equity, part of Intermediate Capital Group Plc (ICG). This transaction underpins a MBO by Affirma Capital, a newly formed, independent private equity firm owned and operated by members of the management team of Standard Chartered Private Equity (SCPE), who will manage the portfolio and investment activities going forward.
The portfolio is comprised of private equity investments in 35 companies across Southeast Asia, India, China, South Korea, the Middle East and Africa. Affirma Capital will manage the Group portfolio acquired by the ICG Strategic Equity funds, and the portfolio owned by third-party investors in SCPE’s existing funds. The terms of the agreement are confidential and the transaction is expected to complete in the first half of 2019.
SCPE is part of the Group’s Principal Finance business. In 2016 the Group decided to reduce its balance sheet exposure to Principal Finance by streamlining it over time and managing its third-party portfolio to maximise value for shareholders and third-party investors. It is expected that the spin out of the private equity business and the sale of the majority of SCPE’s investment portfolio will incur a restructuring charge of around $160 million.
Simon Cooper, CEO, Corporate, Commercial & Institutional Banking at the Group, said: “The SCPE team has streamlined the Group’s private equity business over the past few years, in line with our stated objectives. 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.”
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