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GCS Capital is exclusive bidder for Dexia funds unit

by Renee Cordes In Brussels  |  Published December 4, 2012 at 8:57 AM
Dexia_227x128.jpgMore than a year after Dexia SA's board gave the green light to sell Dexia Asset Management, the struggling French-Belgian lender has entered into exclusive talks with Hong Kong Kong-based private equity firm GCS Capital.

The negotiations, confirmed by both parties in separate statements Tuesday, Dec. 4, bring Dexia closer to completing the last of a series of disposals outlined in an 'orderly resolution' plan in October 2011.

It also comes more than a year after the Belgian, French and Luxembourg governments stepped in to save - and subsequently break up - the first euro-zone lender to fall victim to the sovereign debt crisis. The governments responded with €6 billion ($7.84 billion) capital injection and up to €150 billion in state guarantees.

Last month, the trio injected a further €5.5 billion into the lender, which posted a €1.23 billion third-quarter net loss amid significant one-off costs. They included a €599 million loss recorded on the sale of DenizBank AS and its subsidiaries to Russia's Sberbank, which completed on Sept. 28.

Among other recent disposals were the sale of Dexia's 50% stake in RBC Dexia Invsetor Services Ltd. to Royal Bank of Canada in July, and the sale of Banque Internationale à Luxembourg to Precision Capital and the Grand Duchy of Luxembourg in early October.

Dexia had originally hoped to sell Dexia Asset Management, which attracted first-round bids from Advent International Corp., Bain Capital LLC and Permira this spring, in the first half of 2012. In June, Dexia announced that it was in talks with three unnamed institutional investors but remained silent on the auction ever since.

With management centers in Brussels, Paris, Luxembourg and Sydney, Dexia Asset Management provides services to institutional and private investors in 25 countries and manages about €80 billion It has a workforce of more than 550 people.

GCS Capital, which has additional offices in London and Beijing, is looking to Dexia Asset Management to expand its geographic footprint.

"Dexia Asset Management presents a rare opportunity to acquire a well-capitalized, standalone asset management business with the potential to transition into a global franchise," GCS Capital CEO and founder Huan Guocang said in a statement.

Huan was also a founder of private equity firm Primus Pacific Partners. Before that, he headed the Asia Pacic investment banking operations of HSBC Holdings plc and also served as regional investment banking co-head at Citigroup Inc.

GCS Capital said it will keep all staff and clients in all its markets.

HSBC Bank plc is advising GCS Capital.

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Tags: Advent International Corp. | Bain Capital LLC | Banque Internationale à Luxembourg | DenizBank AS | Dexia Asset Management | Dexia SA | GCS Capital | Grand Duchy of Luxembourg | HSBC Bank plc | Huan Guocang | Permira | Precision Capital | Primus Pacific Partners | RBC Dexia Invsetor Services Ltd. | Royal Bank of Canada | Sberbank | sovereign debt crisis

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Renee Cordes

Correspondent: Brussels



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