Barclays Private Equity's supposed future plans are in the news again, as reports focus on a possible spinout from its parent Barclays Capital, the investment banking arm of Barclays Bank plc (NYSE:BCS).
According to Britain's Financial News, and to the
financial news sheet City AM, a deal could even be in place before the midmarket firm raises its fourth European fund next year -- and it has already received the green light from third party investors.
That's not something to be ruled out. After all, what private equity manager wouldn't rather be part of an independent team than an employee in a huge global bank? So, of course, the private equity arm's co-heads, Paul Goodson in the U.K., Gonzague de Blinières in France and Peter Hammermann in Germany, have discussed the possibilities with Barclays Capital. Indeed, Barclays thinks of the private equity business as cash-generative, but noncore and would, according to one banking source, be ready to sell if the price were right.
But sources close to both Barclays Private Equity and Barclays Capital suggest the speculation is a bit premature and laugh off the idea that the bank is anxious to take risky private equity assets off its balance sheet. The whole thing, they say, is "still at the sounding out stage." There's been no formal approach either within the investment bank or to third-party investors, and there's no timetable for discussions. There's also been no discussion on the possible structure of any buyout, contrary to what was reported last time this story came up in December 2008. Barclays provided 57% of the capital in the 2002 fund, 43% of the 2005 fund and 27% of the 2007, so even the supposed 60/40 ownership split between the management team and Barclays Capital, mentioned in December, may simply be a reflection of the bank's existing share of the three funds, rather than any outline plan.
Besides, Barclays has bigger fish to fry. It's busy trying to sell its exchange-traded funds manager, iShares Ltd., for an estimated £3.0 billion ($44 billion). -
Jonathan Braude
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