Last updated: December 4, 2012 5:50 pm

Dexia in talks over asset management arm

Dexia is in exclusive talks with a Hong Kong-based private equity fund over its asset management arm, which could result in one of the first big acquisitions of a European financial business by an Asian buyer since the sovereign debt crisis.

Neither the Belgo-French financial group nor GCS Capital, which is run by two former senior investment bankers at HSBC, gave many details on the talks, but a deal for the European asset manager could be worth up to €500m, according to people familiar with the transaction.

The eurozone crisis has seen a collapse in the value of most financial services businesses on the continent, but there have been few business sales as buyers have hesitated to take the risk of eurozone exposure, while sellers have been unwilling to consider rock-bottom valuations.

Some European groups have sold businesses in Asia, although often where they have been forced to do so by regulators, as was the case with ING of the Netherlands, or because their businesses have failed to make an impact, such as the Sri Lankan arm of the UK’s Aviva.

Dexia’s asset management business fits both descriptions. “Dexia Asset Management presents a rare opportunity to acquire a well-capitalised, standalone asset management business with the potential to transition into a global franchise,” said Huan Guocang, chief executive and co-founder of GCS.

The sale of the unit by Dexia – which has been bailed out three times – would represent the final stage of the dismemberment of one Europe’s biggest victims of the financial crisis. Dexia sold its Turkish bank DenizBank to Sberbank of Russia in June for about €3bn.

GCS, which was founded by two former senior HSBC bankers with strong ties to Asia, has long been on the lookout for a well-managed funds group that can benefit from Asian investors regaining their interest in investing in Europe once the crisis is over. It would also look to increase the number of products available in Asia to sell back to European and other clients, it said in a statement.

GCS said it would retain all existing staff and offices if it took over the business. HSBC is acting as sole adviser to GCS Capital.

This article has been amended since original publication

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