Banks in new private equity sales

AN increasing number of US and European banks are putting their private equity arms up for sale in order to boost their capital levels.

Crédit Agricole has opened exclusive negotiations to sell a “significant interest” in its private equity arm to global secondaries fund Coller Capital, City A.M. understands.

The French bank is believed to have excluded Carvest, its regional development capital arm in the sale, in order to retain an interest in the private equity sector.

It emerged fewer than 24 hours after Edmond de Rothschild sold its majority stake in Select, the private equity fund of funds, to management, led by David Seligman.

The business, which has funds under management of €200m (£174.55m), will change its name to Seligman Private Equity Select.

Select, which was set up in 2003, has raised two funds-of-funds and has said the final close on its first secondary fund will occur soon.

Banks face having to boost their capital levels because of the wave of regulatory reforms, such as the Basel III guidelines, in the aftermath of the 2008 crisis.

Many have responded by trying to offload their private equity and hedge fund units, although some parts of the funds-of-funds industry fear the market is becoming crowded.

Last month Axa hired Credit Suisse as it put its private equity division up for sale with US giant KKR expected to be among the bidders.

Axa hopes to obtain between £200m and £400m in a transaction, although insiders have stressed a deal is not certain to take place.

Coller declined to comment and Crédit Agricole did not respond to a request for comment.