UK banking group Lloyds is intending to sell its interest in a portfolio of private equity-related investments worth over a billion pounds which made a loss last year.
The lender said that it has agreed the sale of the investment, with gross assets of around £1,050m and the transfer of underway commitments which are expected to be £220m at completion, to a fund financed by Coller International Partners for a cash consideration of £1,030m.
"After the reversal of the related available-for-sale reserve, the transaction is expected to result in a pre-tax gain for the Group," the firm said on Wednesday morning.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Lloyds will continue to manage the fund in return for a management fee, which is thought to be less than £10m a year.
The portfolio generated losses of £40m in 2011 and the bank said that disposal is in line with its strategy of "de-risking its balance sheet and reducing its non-core assets".
The transaction, subject to certain conditions, is expected to complete in the fourth quarter of this year.
BC
-
Cash in on the growth prospects of Europe's companiesOpinion Marcel Stötzel, co-portfolio manager of the Fidelity European Trust, selects three stocks
-
Is the AI boom another dotcom bubble?25 years on from the dotcom bubble bursting, is it time for investors to consider the sustainability of the AI boom in the stock market?
