Exclusive: HSBC to set up buyout advisory group @Rueters

 

Exclusive: HSBC to set up buyout advisory group




By Simon Meads
(Reuters) - HSBC (HSBA.L) is setting up an advisory arm to help leading buyout firms raise new money for deals and has brought in a senior banker from investment bank Greenhill (GHL.N) to lead the group, people familiar with the situation said.




The move comes as many big buyout houses face a funding squeeze with large numbers of investors including public pension funds and banks reducing, or cutting off altogether, investment in new private equity funds.


As a result, even established private equity players are employing the services of advisers to open doors to previously untapped sources of capital, such as sovereign wealth funds, making the so-called "placement" business one of the bright spots in the investment banking world.


HSBC has hired Christopher Cooke from Greenhill to lead the new fundraising group in London and is looking to hire more staff, three people said.


Greenhill said Cooke had left the group about two months ago, but did not give any further details.


HSBC declined to comment.


By entering the placement market, HSBC would be pitching its services against a small group of global investment banks, including UBS (UBSN.VX), Credit Suisse (CSGN.VX) and Lazard (LAZ.N), which are active in the area.


Most such businesses are under the umbrella of independents like Greenhill or Evercore, or are boutiques such as Campbell Lutyens or Triago. Teams can range from a handful or experienced fundraisers to groups of more than 50 professionals.


Cooke joined Greenhill in 2008 as a managing director of its fund placement group, having previously been a member of the fundraising and investor relations team at hedge fund CQS.


Prior to that he had held a senior fundraising role at Lehman Brothers.


Private placement services used to be primarily in demand by new private equity firms looking to raise funds for the first time.


But since the credit crisis, capital has become more scarce, sending many firms to placement agents to find new investors in the Middle East or Asia.


"In today's world, whether you are a hot fund or a cold fund, you need an adviser," said one of the people. "Investors need to process a huge amount of information and an agent can help them get what they need."


To raise its fifth fund -- at 4.75 billion euros the largest since the credit crisis -- Swedish private equity group EQT used the services of UBS.


Private placement groups also frequently broker sales of large private equity portfolios between investors, a market that enjoyed a record year in 2011 and could see up to $50 billion of assets put up for sale this year, according to some in the industry.


Greenhill had advised AXA Private Equity on two of the largest deals of recent years, buying a $1.9 billion tranche of assets from Bank of America (BAC.N) and another of $1.7 billion from Citigroup (C.N).


(Editing by David Cowell)

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