The group of investment and retail banks cutting loose their private equity divisions has gained another member after Lovells client ING finalised the spin-off of Baring Private Equity Partners (BPEP).
The management buyout (MBO) of the division is part of ING’s divestment of non-core groups. The deal, finalised on 28 May, was originally hoped to be completed by the end of 2003 after being announced last October.
However, Robert Barry, private equity partner at Travers Smith Braithwaite, which acted for BPEP, said the structure of the deal changed during the course of the instruction. Initially, the newly spun-off business was expected be headquartered in London, but the different components of BPEP opted for the regional companies being owned by the individual investment partners managing the regional funds.
BPEP is made of up six regional fund groups, with teams in Western and Central Europe, Asia, India and Russia. However, all will continue to use the Barings name, with the central function located in London.
Although this is the first deal that Barry has acted on for BPEP, Travers has a long relationship with the private equity group.
Lovells has also acted for ING for a number of years. Lovells’ lead partner on the spin-off Marco Compagnoni advised ING’s original purchase of Barings after its collapse in the mid-1990s. The debt-ridden Barings was bought by ING for a nominal fee of £1, donated by Compagnoni himself at the time of the sale. He was assisted on this most recent deal by Malcolm McDougall and Samantha McGonigle.
The MBO of BPEP is just one in a long line of examples of banks spinning off their private equity groups. Just last year, HSBC saw its private equity division break off to form Montagu, advised by Linklaters and Macfarlanes respectively.
Around the same time, Deutsche Bank divested its DB Capital Partners division, which formed MidOcean Partners. On that deal, Linklaters acted for the breakaway management, with US advice provided by Kirkland & Ellis. Deutsche Bank was represented by Allen & Overy, with White & Case as US counsel.