APRIL 5, 2009, 8:01 P.M. ET
Financial News: Barclays Cleared For Spinoff Of Buyout Arm
Barclays Private Equity, the top-performing, in-house buyout division of Barclays Bank, has received approval from its third-party investors to spin off from its parent before its fourth fund is raised next year.
However, the U.K.-based bank, which also started exclusive talks to sell its exchange-traded fund manager iShares to buyout firm CVC Capital Partners last week, has yet to agree a deal. A Barclays spokesman declined to comment.
Roger Jenkins, chief executive of the investment banking subsidiary of Barclays Capital's principal investments arm, has been leading the negotiations with regional co-heads of Barclays Private Equity Paul Goodson (UK), Gonzague de Blignieres (France) and Peter Hammermann (Germany) representing the three offices planning the spinoff.
Jenkins and Goodson reportedly met with third-party investors in Barclays Private Equity's funds in late December to discuss strategic options for the group but a source with knowledge of the talks between the bank and its funds' external investors said an indicative agreement to support a spinoff had been given within the past two weeks.
A large investor in the arm's first three funds said: "Barclays Private Equity contacted us and our understanding is there is a general willingness to go down this route, but the hows and terms have not been agreed."
Barclays Bank has been contributing less of its balance sheet to supporting Barclays Private Equity funds, having moved from committing about half the total raised for its first fund to EUR650 million of the EUR2.4 billion in fund III closed in August 2007. External investors in Barclays Private Equity Fund III are some of the world's leading managers of funds of funds. All those contacted declined to comment.
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