HSBC In Talks to Sell Private Equity Biz

LONDON, June 4 (Reuters) – British bank HSBC (HSBA.L) said it is in talks that could lead to five separate management buyouts of its private equity fund management businesses, as banks go back to focusing on core operations.

Europe’s biggest bank said on Friday talks are expected to lead to spin-outs of its private equity fund management businesses in Hong Kong, Britain, the United States, Canada and the Middle East.

HSBC’s regional private equity businesses focus on supporting management buyouts in Britain, technology investments in Asia, mid-market private equity and mezzanine deals in the U.S. and management buyouts and providing capital for growing businesses in Africa.

HSBC spun off its bigger European buyouts business in 2003, retaining a minority stake in the business, which subsequently became Montagu Private Equity.

In a separate statement, independently listed vehicle HSBC Infrastructure (HICL.L) said the bank had agreed terms to spin off its infrastructure and real estate investment arm HSBC Specialist Investments.

The deal is expected to be completed by the end of 2010 and will see HSBC retain a substantial minority stake in the business.

HSBC Infrastructure said it is in discussions to ensure that its operational relationship with HSBC Specialist Investments continues. It said it had been reassured that steps are being taken to secure the necessary consents and regulatory approvals. (Reporting by Simon Meads; Editing by Sharon Lindores)