Santander inks €700m deal with US private equity firms

Michael Bow
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BANKING giant Santander yesterday said it would sell a 50 per cent stake in its fund management business to US private equity groups Warburg Pincus and General Atlantic, netting the Spanish business €700m (£599m).

Santander Asset Management (SAM), which is made up of 11 separate money management businesses, said the deal would help boost the global growth of the company, which has a strong presence in Latin America and Europe.

SAM manages around €152bn. Yesterday it said it wanted to double the asset base within the next five years, go after lucrative institutional mandates, and participate “in the consolidation process taking place in the industry,” hinting at potential future buys.

Banco Santander chief executive Javier Marin said: “This partnership puts Santander Asset Management at the forefront of the industry’s consolidation process.”

The deal, which values the fund management business at €2.05bn, had been widely flagged earlier in the week, after Santander confirmed to the market on Tuesday that it was in talks to sell a stake.

The tie-up between Warburg Pincus and General Atlantic, which are two of New York’s best known private equity outfits, marries the bigger Warburg with the smaller General.

Warburg, founded in 1966, has more than $40bn ($26.3bn) of assets under management, while General manages $17bn.