BC Partners, the private equity group, has stopped work on a potential $5 billion counter-bid foriShares, the exchange-traded funds arm of Barclays, after the bank started talks to sell its entire asset management business,Barclays Global Investors, the Financial Times reported.

Barclays had been keen to attract counter-bids to improve on the $4.2 billion sale of iShares that it agreed last month with CVC Capital Partners, another private equity group, the FT said.

But interest from potential counter-bidders has waned sinceBlackRock, the US money manager, approached Barclays about buying all of BGI, including iShares, in a deal expected to be worth more than $10 billion.

The bank has made it clear that it is only prepared to sell BGI, which manages £1.047 trillion ($1.66 trillion) of assets, if it receives a top price.

A person close to BC Partners, one of Europe’s biggest private equity groups with €11 billion under management, said it had “downed tools” after failing to receive assurances that Barclays was still interested in a stand-alone sale of iShares.

“The focus at Barclays has clearly switched to selling all of BGI, with BlackRock as the frontrunner, so there doesn’t seem much point for BC Partners in continuing to work on an iShares bid,” said the person.

Barclays can seek counter-bids for iShares and other related businesses until June 18, under a “go shop” provision of that sale, but the bank must pay a $175 million break-up fee to CVC if it chooses an alternative bid.

The bank’s decision to sell iShares helped it to resist taking bail-out funds from the government by bolstering its capital levels. Barclays passed a stress test devised by the Financial Services Authority in March, which checked if it could withstand a severe recession. But a BGI sale would bolster the bank's balance sheet.