HSBC spins off Asian private equity unit

HSBC’s Asian private equity unit has been taken over in a management buyout and renamed Headland Capital Partners, it emerged yesterday.

The sale is the first of five planned management buyouts of HSBC’s private equity businesses.

It is the latest to respond to pressure from regulators on banks to spin off their private equity activities.

HSBC is also in talks about management buyouts of its private equity units in the UK, US, Canada and Middle East.

Headland’s management team will own 80.1 per cent of the firm with HSBC holding the rest.

The bank is keeping hold of its investments in Headland’s funds. The firm, which raised a $1.47bn fund in 2008, invests $40m-$150m for controlling or minority stakes in companies based in greater China, South Korea, south-east Asia and India.
The
biggest of the five private equity businesses being spun out of the bank is HSBC Specialist Investments in the UK, which manages some $4bn of assets, mostly in infrastructure and property funds.

Several other banks are looking at spinning off their private equity operations. Barclays Private Equity is believed to be in talks about spinning off from Barclays as part of plans to raise its next buyout fund, LDC is considering a break from Lloyds Banking Group and Citigroup has spun off parts of its private equity arm.