HSBC reaches MBO agreement of £50m for private equity business

According to press reports, HSBC has reached a theoretical agreement with the 27 executives of its private equity arm, HSBC Private Equity, to sell the business to them for over £50m in the next few months, possibly mid-November. The private equity division is led by Chris Masterson, and manages an investment portfolio worth £700m; the group has been negotiating the spin-off since May. HSBC Private Equity has backed 400 companies since it was established, but a conflict of interest arose when the parent bank decided to invest around £500m in AEA Investors, a US private equity firm. HSBC is to retain a 20% stake in the division. Analysts believe the HSBC split may inspire other private equity divisions to split from their parent banks.

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