SocGen To Sell US Asset Manager To Private Equity Group

Max Skjönsberg

10 August 2012

Société Générale, the French banking group, has agreed to sell US-based asset manager TCW Group to the Carlyle Group and the management of TCW for an undisclosed sum.

David Lippman has been named as president and chief executive of TCW, which has increased employee ownership of the firm to around 40 per cent. Lippmann succeeds Marc Stern, who will become chairman of the newly formed TCW board of managers when the deal has been closed. The transaction is expected to be completed in the first quarter of next year.

SocGen said the decision is part of the bank’s transformation plan to focus its resources on its core activities and simplify its organisation. It is estimated to increase the group’s Core Tier 1 ratio by 0.13 per cent when completed.

Founded in 1971, TCW is a diversified asset management firm with approximately $130 billion under management. The firm’s $42 billion mutual fund franchise has attracted around $13 billion in net inflows in 2011 and 2012.

TCW will become Carlyle’s twelfth investment since 2008.

Meanwhile, Paris-listed SocGen said it continued to deleverage its balance sheet when presenting its results for the second quarter and said that risk-weighted assets fell by €6.5 billion in the three months to 30 June. The bank had a core Tier 1 capital ratio of 9.9 per cent at the end of June.

Moreover, net banking income at the private banking, global investment management and services arm of the bank declined 5.7 per cent in the second quarter of 2012 to €533 million (around $656 million) from the same quarter a year ago, hit by weaker revenues in a “sluggish environment”. Revenues within private banking fell 10.3 per cent year-on-year in the quarter, following an operating loss recorded in Asia of €9 million. When restated for this one-off loss, revenues declined by 5.7 per cent.

At the end of June, the French firm’s private banking arm had €85.6 billion assets under management, up from €84.7 billion at the end of last year.