Standard Chartered PE renews spin-out plan

The London-based bank’s private equity arm plans to form an independent entity by 2018 and has appointed Credit Suisse as a financial advisor.

Standard Chartered Private Equity (SCPE) has renewed plans to spin off from its parent company and has hired Credit Suisse as financial advisor, Private Equity International has learned.

The spin-out, which will be independent of Standard Chartered Bank’s branding, has received full support from the bank and its third-party investors,” a source with knowledge of the matter told PEI. SCPE also “expects backing from financial sponsors and asset management platforms where there is complementarity with the unit”, the source added.

SCPE expects to finalise the spin-out in in the next year with all of its 55 investment professionals joining the new firm, the source said.

The move comes a year after Standard Chartered’s scrapped plans of a management buyout over reported disagreements on price and the departure of the head of the unit, Joseph Stevens in November 2016.

SCPE has undergone a period of consolidation in the last 12 months, which has resulted in “stabilising its portfolio, achieving profitable exits, and returning capital to its third-party investors”, the source noted. The process started after the London-based bank announced in November 2015 that it would streamline and reduce its private equity business in the next two years and focus on selected investments.

It is unclear how much capital has been returned to investors but PEI understands the unit has about $1 billion in private equity assets remaining on its current balance sheet. Since inception SCPE has invested over $6 billion in over 100 companies across the Standard Chartered footprint, it said on its website.

SCPE targets investments in companies with principal operations and management in Greater China, Korea, South-East Asia, sub-Saharan Africa, the Middle East, and India, according to information on its website. It has previously backed companies such as Singapore-based baking supply company Phoon Huat, Vietnamese mobile money operator M_Services and Chinese health and beauty chain Shanghai Siyanli Industrial Company.

In other news, Zhu Wei, managing director and head of China at SCPE is leaving the firm by the end of the year to pursue other interests. Zhu will remain closely associated with the firm in an advisory capacity for the firm’s investments in China.

SCPE declined to comment.