Barclays to wind down small buyout unit

Barclays Ventures, which focuses on small UK buyouts, is halting new investments. The group’s managing director, Kip Kapur, is resigning.

Barclays is winding down its small buyout team called Barclays Ventures, which holds 55 investments and has about 45 employees.

The group will continue to hold and even invest in its existing portfolio companies, and will sell them off to achieve maximum value, rather than holding quick fire sales. The Barclays Ventures team will be reduced to about 30 to 35 members, and the group’s leader, Kip Kapur, is resigning. Kapur, the group’s managing director, joined Barclays Ventures in 2002.

Barclays Ventures provides equity financing from the bank’s balance sheet in buyouts of small companies in the UK worth between £5 million and £55 million. The unit was formed in the mid-1990s and was formed to “ride the private equity boom through the 1990s”, a source told PEO.

Kip Kapur

The bank no longer sees a “synergy” with the investment strategy of the team, a source said. It’s no longer attractive for a large bank to be in the business of buying small companies, which is outside the bank’s core focus.

“Banks don’t necessarily want to be in bed with a client on the equity risk side and the debt risk side,” a source said.

The group’s portfolio includes companies in various industries, including healthcare, information technology services and software, media, retail and consumer, travel and leisure and manufacturing and engineering. Portfolio companies include technology company Adeptra, building materials company Breedon, the McCambridge Group, a bakery and apparel company Fila.

Barclays Private Equity, which raises its own funds, has been considering a spin-out from its parent company, Uk-headquartered Barclays Group.