Capital Markets: Private Equity - Not At Home - Many Banks Have Left Behind Private Equity And Its Volatile Earnings But A Core Remain Committed To In- house Funds. However, Basel II's Proposed Increase In The Regulatory Capital Could Deal A Crippling Blo.

Banker, The, June, 2004

Banks have been major private equity investors since the first leveraged buyouts in the early 1980s. Yet although banks still make substantial investments into external private equity funds - partially to maintain relationships with the independent firms for debt and advisory mandates - the number of banks with in-house funds has dwindled. Numerous banks have closed their direct investment in-house operations over the past few years, spinning them off through management buyouts (MBOs) or by secondary sales.

Such exits may be nothing new - many of today's leading independent firms were bank spin-offs, such as CVC from Citigroup and Permira from Schroders. However, the pace of bank exits has increased since 2000. Some units have been sold off following mergers or...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.