The managers of Standard Chartered Plc’s private-equity unit have secured backing for a multibillion-dollar spinoff from Intermediate Capital Group Plc as the British-based bank exits that business, according to people with knowledge of the matter.
Standard Chartered will sell about $1 billion of assets to ICG, a London-based asset manager, under the terms of the proposed deal, the people said. A new company, owned by executives at the bank’s private-equity unit and led by Nainesh Jaisingh, will then manage this portfolio along with about $2.1 billion for third-party investors including Goldman Sachs Group Inc., said the people, who requested anonymity as the details are private.
The private-equity division has been a burden for Standard Chartered Chief Executive Officer Bill Winters as he attempts to overhaul the bank and pull back from risky deal-making. The unit, which invests in companies across emerging markets, has been responsible for more than $1 billion of losses and restructuring costs since he took charge three years ago, and he’s been looking for ways to exit the business since late 2016, Bloomberg has reported.
Julie Gibson, a spokeswoman for Standard Chartered in London, and Alicia Wyllie, a spokeswoman for ICG, declined to comment.
ICG will also provide about $400 million to the new, spun-out firm for fresh investments, which would ultimately bring its assets under management to about $3.6 billion if the deal is successful, the people said. The transaction is expected to be completed by the end of the year, one of the people said.
London-based ICG manages about 33 billion euros ($38 billion) of assets, according to its website. The firm’s strategic equity business, overseen by Ricardo Lombardi, is leading its involvement in the deal, one of the people said.
Standard Chartered’s private equity unit has used the bank’s funds to amass stakes in emerging-market companies, including a Vietnamese kids’ play-center operator, an Indian movie-production company, a Jordanian poultry producer and, more recently, a Singaporean crane supplier.
While initially profitable, the division’s fortunes turned in 2015, partly because of the plunge in commodity prices. Winters considered selling the business to its managers in 2016 before pledging instead to exit the business by the end of this year.