Warburg, Temasek in Santander deal

 The deal comes a month after Warburg booked a 6x return on the sale of IParadigms

A consortium led by Warburg Pincus, which includes Singaporean sovereign wealth fund Temasek, has agreed to buy 50 percent of Santander’s custody business in Spain, Mexico and Brazil.

The value of the Spanish bank’s custody division is €975 million, according to a statement. The deal will generate €410 million in net capital gain for the Santander Group.

The custody division of Santander in Spain, Brazil and Mexico has €738 billion in assets under custody. The company will focus on enhancing the products and services provided to its customers through greater investment in its technology platform and team, Warburg said in the statement. The firm declined to comment beyond the statement.

Warburg will make the investment, which is subject to legal and regulatory approvals, using capital from its $11.2 billion Fund XI that closed last May.

Warburg has been relatively busy this year. Last month, it sold California-based software firm iParadigms to Government of Singapore Investment Corporation (GIC) and Insight Venture Partners in a deal worth $752 million. In April, the firm bought payment technology company Electronic Funds Source for more than $1 billion, while in the same month it invested $70 million in Beijing-headquartered recruitment services business Liepin.com alongside Martix Partners China. It also bought aviation company Mercator in April.

In March Warburg floated UK-based discount retailer Poundland through a listing on the London Stock Exchange, netting the firm a 4.5x return, while in February, Warburg invested $32 million in telemedicine company Specialists On Call. In January, it agreed to acquire a majority stake in Source.

Warburg, which has a portfolio of around 120 companies, has more than $37 billion in assets under management.

Temasek, which was founded in 1974, owns a $215 billion portfolio as at 31 March 2013, with 71 percent of its underlying assets in Asia, including Singapore, and 25 percent in North America, Europe, Australia and New Zealand.