Standard Chartered has sold its private equity business to Intermediate Capital Group in a spin out valued at about £790 million ($998 million).
Funds managed by ICG bought a majority of the private equity assets held on the London-based bank’s balance sheet, according to a statement Monday from ICG. The deal backs the creation of Affirma Capital, a private equity firm owned and run by the former leadership of Standard Chartered's private equity team.
The spin out will allow Standard Chartered to reduce its balance sheet exposure to “principal finance”— an area of its business that includes alternative assets — as part of an effort it announced in 2016, according to a statement Monday from the bank. It will also give ICG the opportunity to expand into Asia, which ICG said is a key region for its growth.
“This first transaction for our strategic equity business in the region demonstrates its global reach and potential for growth,” said Benoît Durteste, CEO of ICG, in the statement. “The success ICG has enjoyed, first in Europe and more recently in North America, has shaped our strategy toward our expanding business in Asia, with Asia’s growing economies creating significant investment opportunities for ICG.”
At the deal’s close, Affirma will have £2.85 billion under management, which includes the portfolio being acquired by ICG as well as assets that Standard Chartered manages for outside investors in its Marina and Korea funds. The portfolio includes investments in 35 companies in Southeast Asia, India, China, South Korea, the Middle East, and Africa.
Under the agreement, ICG will provide Affirma with a newly-established pool of £316 million in dry powder to use for new deals and follow-on investments. Nainesh Jaisingh, who previously led Standard Chartered private equity business, will manage a team of 55 employees at the newly-formed firm, according to ICG's statement.