Barclays sells Absa private equity business

Barclays Africa Group, previously known as Absa Group, is parting ways with its interests in Absa Capital Private Equity Proprietary Limited (ACPE) in a development that seems to further alignment of the local banking group to its London based parent company Barclays.

The development comes amid heightened efforts by the London based parent group, Barclays, to knock its South African based subsidiary into shape. Barclays acquired a controlling stake in Absa Group, now known as Barclays Africa Group, in 2006 and has in the past few months upped efforts to streamline the operation.

Barclays Africa Group announced early this week that it has disposed of its 73.37% limited partnership interest in Absa Capital Private Equity Fund I (ACPE Fund I) to a syndicate led by HarbourVest Partners, comprising funds managed by HarbourVest and Coller Capital. This sale is somewhat similar to a 2011 Barclays transaction where the group offloaded the European based Barclays Private Equity operation in a management buy out. That transaction led to the creation of a new private equity management firm Equistone Partners Europe which was to be mended by former Barclays Private Equity executives.  This transaction formed part of a general European trend where bankers have had to dispose private equity operations and other non core assets to meet stiffer capital reserve requirements.

In this weeks announcement Barclays Africa Group noted that “As of 31 December 2012, the reported carrying value of BAGL’s interest in ACPE Fund I was R2.3bn.”

It added that “As a consequence of the sale, Absa Capital Private Equity Proprietary Limited (ACPE), a wholly-owned subsidiary of Barclays Africa Group and the Investment Adviser to the General Partner of ACPE Fund I, has been spun off to become a new independent South African private equity fund manager, Rockwood Private Equity.”

“ACPE Fund I is a fully invested South African private equity fund established in 2008. The Fund has exposure to the general industrials sector in sub-Saharan Africa and comprises the following investments:

–          Bravo Group, a diversified manufacturer of household furniture products and licence holder;

–          EnviroServ, a leading waste management company specialising in industrial and commercial waste management;

–          Kwikspace, the largest and most diverse manufacturer of prefabricated buildings in sub-Saharan Africa;

–          Safripol, a plastic manufacturer and the only producer of High Density Polyethylene and one of two producers of Polypropylene in South Africa; and

–          Tsebo, a diversified catering, facilities management and cleaning company, with operations in various countries across Africa.”

The buyers, HarbourVest and Coller Capital, are established global private equity players. HarbourVest is an independent global alternative investment firm that invests in venture capital, buyout, mezzanine debt, and other private debt through primary partnerships, secondary purchases, and direct co-investments.  Coller Capital focused on the private equity secondary market.

This transaction came a few months after Barclays consolidated its African operations under the JSE listed Barclays Africa Group banner. This was achieved via the injection of a number of Barclays operations within the sub Saharan region into Barclays Africa Group which then saw the London based parent company increase its stake in the company from about 55% to 62.3%.

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