TPG buys into Danish bank

US buyout group TPG Capital has backed Nordic lender Saxo Bank, investing $560m in equity for a 30% stake, and providing an exit for private equity peer General Atlantic.

TPG Capital has acquired a 30 percent holding in Danish lender Saxo Bank in a deal which values the bank at about DKr9.6 billion (€1.3 billion; $1.9 billion). It is the latest in a slew of deals by the Texas-based buyout firm in the banking sector, which have come despite a high profile loss on its investment in US lender Washington Mutual in 2008.

TPG has the option to increase its holding in Saxo to 40 percent, exercisable before the deal completes in late Autumn, a spokesman said. TPG acquired the stake from several parties, including Portuguese-based Banco Espirito Santo and buyout peer General Atlantic, both of which have now fully exited the business, according to a TPG spokesperson. The level of General Atlantic’s return could not be determined as the US firm had not returned calls by press time.

The bank’s founders, Kim Fournais and Lars Seier Christensen, will retain majority ownership and continue in their roles as co-chief executives following the deal, Saxo said in a statement.

TPG financed the deal solely using equity from TPG Partners VI, its 2008 vintage, $19.8 billion mega-fund. The Texas-based buyout firm has had mixed success with its investments in the financial services sector in recent years. Most notably, it lost more than $1.3 billion on US lender Washington Mutual when the company collapsed in 2008.

Since then however, it has continued to pursue investments in the banking sector. In February this year, for example, it acquired a 10 percent stake in Russian state-backed investment bank VTB in a $100 million deal. In late 2010, the buyout firm partnered with peer Kohlberg Kravis Roberts and Singaporean state fund GIC and insurer Great Eastern Life to purchase Morgan Stanley’s 34 percent stake in investment bank China International Capital Corporation.