Close Brothers Spins Out Growth Capital Unit

LONDON (Reuters) – British merchant bank Close Brothers (CBRO.L) on Monday said Close Growth Capital, a private equity unit, has been spun out in a management buyout.

The move was the third spin-off of a Close Brothers’ private equity business. Close Ventures, a unit with 200 million pounds ($334.9 million) under management, spun off in January and rebranded as Albion Ventures. Close Brothers Private Equity, a buyout unit with a focus on mid-sized companies, spun off as CBPE late last year.

Close Brothers appointed new Chief Executive Preben Prebensen in April. He has since sold Close Brothers’ corporate finance arm to Daiwa Securities (8601.T).

The spin out of Growth Capital, which typically invests 5 million pounds to 50 million pounds in management buyouts, comes as the buyout markets continue to decline.

Bill Crossan, managing partner of Growth Capital, said independence would allow the team additional motivation to build the business.

“Business and entrepreneurs are finding it difficult to access conventional bank debt and this presents a significant opportunity for Growth Capital Partners,” he said in a statement. Terms of the spin-off were not disclosed.

It manages about 90 million pounds of private equity investments, including investments in oil and gas IT software provider Amor Group and environmental consultancy Entec. ($1=.5972 Pound)

(Reporting by Daisy Ku; editing by Simon Jessop)