LONDON • Standard Chartered plc (StanChart) reached an agreement to separate its private-equity unit, ending more than two years of effort by CEO Bill Winters to get out of the business.
Intermediate Capital Group plc said yesterday that its funds are buying a majority of the bank’s private-equity assets in a transaction valued at about £790 million (RM4.17 billion). The former StanChart private-equity team, led by Nainesh Jaisingh, will run the portfolio in their new firm, Affirma Capital, after a management buyout.
The spin-out will result in a US$160 million (RM668.8 million) charge, StanChart said. The unit, which invests in companies across emerging markets, has helped create more than US$1 billion of losses and restructuring costs since Winters took charge three years ago, and Bloomberg has reported he’s been looking for ways to exit the business since late 2016.
StanChart briefly pared its losses after the announcement, before the shares resumed their retreat, falling 2.2% at 11:17am in London yesterday. The stock is down about 24% this year.
The business’ investments have included a Vietnamese kids’ play-centre operator, an Indian movie-production company, a Jordanian poultry producer and, more recently, a Singaporean crane supplier.
While initially profitable, its fortunes turned in 2015, partly because of the plunge in commodity prices.
Winters considered selling the business to its managers in 2016 before pledging instead to leave the business by the end of this year. The exit is just one facet of Winters’s revamp of the bank since he took charge in 2015.