Lloyds is latest bank to mull PE sale

Lloyds Banking Group, part-owned by the UK state, is mulling the sale of about €500m of private equity fund stakes as it follows other lenders in divesting non-core assets.

Lloyds Bank is understood to be exploring the sale of about €500 million ($667 million) of private equity commitments held by its Bank of Scotland subsidiary, according to press reports.

Lloyds declined to comment specifically on the reports, but a spokesman said: “We have previously stated our commitment to reduce our non-core assets and this is a process that is ongoing.”

In June this year, the bank decided against spinning out its in-house buyout unit LDC. 

The commitments are understood to be mostly to European buyout funds, and were made by Bank of Scotland to cement lending relationships with European GPs.

The UK bank joins a slew of other lenders looking to offload non-core assets. Barclays spun out its in-house buyout arm earlier this month, which has since rebranded as Equistone Partners Europe. AXA Private Equity in particular has been a keen acquirer of banks’ private equity portfolios this year.

In September it bought a portfolio of fund commitments from Japanese bank Mizuho for $500 million, having paid $1.7 billion for private equity assets held by Citigroup in June. Earlier in the year, it sealed similar deals with Bank of America and HSH Nordbank.