LDC could be spun out
LLOYDS Development Capital, the private equity arm of Lloyds Banking Group, could be spun out as a standalone organisation within the next five years.
The business is only one of two remaining private equity firms in the hands of a high street bank. The other, Barclays Private Equity, has also been the subject of several reports of a potential sale to its management team.
Since the start of the financial crisis there has been some criticism of the investment activities of high street banks and in opposition the Convervative party actively favoured a break-up of banking operations so that riskier activity such as private equity lending and primary trading is left to investment banks with regular retail banking operated by clearing banks.
Following newspaper reports yesterday quoting LDC chief executive Darryl Eales’ thoughts on a potential unwinding from its parent, a spokesman for LDC said: “As one of the few captives remaining in the UK private equity industry, there has always been speculation surrounding LDC and its ownership structure.
“We enjoy a strong relationship with our parent bank but it’s clear that if the current regulatory environment continues to play a part in shaping this interaction, then together we may need to explore options that are in the best interests of LDC and Lloyds Banking Group.
“For the time being we continue to be the highly successful private equity division of the Lloyds Banking Group and will continue to deliver excellent results back to them.”
LDC has one of its largest private equity operations outside of London based in Manchester.
