RBS Said to Sell Stake in Private-Equity Arm to Adams Street

May 29, 2014 5:59 am ET

(Updates with other companies owned by the private-equity unit in seventh paragraph.)

May 29 (Bloomberg) -- Royal Bank of Scotland Group Plc agreed to sell its minority stake in a private-equity unit to an investor group led by buyout firm Adams Street Partners LLC, according to two people with knowledge of the matter.

The Edinburgh-based bank agreed to sell its stake in RBS Special Opportunities Fund last month in a deal valued at about 100 million pounds ($167 million), said the people, who asked not to be identified because the talks are private. The investor group may provide new capital for transactions, the people said.

RBS, Britain’s largest state-owned lender, is the latest bank to divest private-equity holdings to focus on its main businesses as regulators press lenders to bolster their capital. Credit Suisse Group AG transferred its buyout unit, DLJ Merchant Banking Partners, to the fund’s managers last year, while HSBC Holdings Plc hired Campbell Lutyens & Co. to look at sale options for its direct investment unit in February.

Spokesmen for RBS and Adams Street, which is based in Chicago, declined to comment.

The bank began the process of spinning off the private- equity fund last year. The unit, which raised 1.1 billion pounds from investors in 2007, takes both debt and equity stakes in U.K. companies, according to its website, and is majority owned by its managers.

Erno Laszlo

The Special Opportunities Fund is currently selling one of its companies, U.K. foreign-exchange provider TTT Moneycorp Ltd., with both JC Flowers & Co. and Warburg Pincus LLC among the bidders, four people with knowledge of the matter said earlier this month.

The fund also sold shares of U.K. debt-recovery business Arrow Global Group Plc on the London Stock Exchange in October, valuing the company at about 360 million pounds. Other investments include U.S. skincare brand Erno Laszlo Inc.

RBS, which posted its largest annual loss since 2008 last year, is being weighed down by legal bills and risky assets five years after receiving the biggest bank bailout in history. The company is scaling back its investment-banking operation to focus on U.K. consumers and businesses.

Yesterday, the company said it plans to cut hundreds of U.S. jobs while shrinking its mortgage-trading business before stiffer capital rules are implemented.