StanChart to cut private-equity assets in chief executive Bill Winters' overhaul plan

Standard Chartered bank plans to reduce the amount of shareholder funds invested in private equity, a spokesman said on Nov 10, 2016.
Standard Chartered bank plans to reduce the amount of shareholder funds invested in private equity, a spokesman said on Nov 10, 2016. ST PHOTO: DON CHI

LONDON (BLOOMBERG) - Standard Chartered, the United Kingdom bank reeling from losses in emerging markets, plans to reduce the amount of shareholder funds invested in private equity as Chief Executive Officer Bill Winters pulls back from high-risk deals.

The London-based bank will "reduce the group's balance sheet exposure" to the principal finance division that houses the Standard Chartered Private Equity business, Shaun Gamble, a spokesman for the bank, said in an e-mailed statement. Standard Chartered will manage the unit's third-party assets "to maximize returns", Mr Gamble said.

Mr Winters, 55, has been weighing options for the SCPE unit as he pushes through an overhaul to cut risks at Standard Chartered after the commodities crash saddled the lender with losses in 2015. While the private-equity unit, which manages about US$5 billion (S$6.9 billion) , has made money in the past with stakes in companies across emerging markets, the bank lost US$197 million in principal finance in the nine months through September.

"We are committed to optimizing or restructuring businesses and assets that are not generating sufficiently good financial returns," Mr Gamble said in the statement.

The SCPE unit manages about US$2 billion of Standard Chartered's cash and and about US$3 billion for third-party investors including Goldman Sachs Group and Coller Capital, people familiar with the matter have said.

Mr Winters had discussed selling SCPE to its managers before the sale talks fell apart and the bank ousted the head of the unit, Joseph Stevens, Bloomberg reported last week. Nainesh Jaisingh, a senior executive at the division, will lead the business, according to the statement.

"Our experienced Principal Finance team, led by Nainesh Jaisingh, will manage the business actively during this next phase to maximize value for shareholders and third-party investors," Mr Gamble said.