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StanChart Private Equity to be wound up over next 2 years

Standard Chartered’s Private Equity unit is reportedly going to be wound down rather than sold to its executives, according to reports in the Wall Street Journal and Bloomberg. Discussions for a possible management buyout had been taking place but they ground to a halt last week over, among other things, disagreements on price and how to deal with potential liabilities from some of the unit’s investments.

Instead, the bank will look to sell down its $5 billion portfolio over the next two years.  According to the Wall Street Journal, this involves seeking outside buyers for stakes in around 80 companies in Asia, Africa and the Middle East. Of the $5 billion portfolio, $2 billion are stakes owned by Standard Chartered itself with the balance being managed by the private equity unit on behalf of outside investors.

Fallen valuations of soured private equity investments stripped $197 million from the bank’s revenue between January and September while the U.S Justice Department is currently investigating allegations that one of the unit’s Asian investments, Maxpower Group PTE, paid bribes to win contracts.

The sales will be overseen by Nainesh Jaisingh, a senior member of the bank’s private equity unit, following the departure of the unit’s head, Joe Stevens.

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