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Lloyds Banking Group Sells Private Equity Unit

Knud Noelle, 6 July 2010

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Lloyds Banking Group, which had to be bailed out by the UK government, has agreed to sell off a private equity investment portfolio in its Bank of Scotland Integrated Finance (BOSIF) business to Cavendish Square Partners.

Cavendish Square Partners is a new joint venture which will be owned to about 70 per cent by Coller Capital, the investor in private equity secondaries, and to about 30 per cent by Lloyds Banking Group, Lloyds said in a statement.

Coller Capital paid £332 million (about $500 million) for its majority stake. This values the portfolio at approximately £480 million. Coller Capital said it will keep the existing BOSIF management team.

After having been bailed out by the UK government, the European Commission ordered Lloyds to sell off some non-core assets. The Commission, which acts as a regulator for state aid programmes within the EU, has also ordered several other banks to do so after receiving bailout money from their governments.

Although Lloyds is spinning off non-core assets, the firm remains very committed to keeping its wealth operations, this publication understands. 

The companies in the portfolio are UK-headquartered trading businesses across a range of industry sectors.

The transaction is subject to certain conditions, including regulatory approval. It is expected to complete in the third quarter of 2010.

Jeremy Coller, chief investment officer of Coller Capital, said that he was delighted about teaming up with Lloyds Banking Group. He added: “Our aim now, working closely with LBG, will be to ensure the BOSIF companies have access to the resources they need to reach their full potential.”

Coller Capital, founded in 1990, has approximately $8 billion under management. 

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