Saxo secures major private equity shareholder

TPG Capital, a Texas-based private equity firm that already owns stakes in SunGard and US broker-dealer LPL Financial, is to acquire a 30% stake in Saxo Bank, following a purchase agreement signed yesterday.

The news follows an extensive search for a new shareholder that began at the start of the year, as existing shareholders General Atlantic and Portuguese bank Banco Espirito Santo seek to divest their stakes. General Atlantic invested in Saxo in 2005 and held a 22% stake, while Banco Espirito Santo invested in 2008 and held a 10% stake.

Following yesterday's agreement, Saxo Bank's co-founders and chief executives Kim Fournais and Lars Seier Christensen will remain majority shareholders, and Asiff Hirji, who leads TPG Capital's financial technology efforts, will join the bank's board. Prior to joining TPG Capital, Hirji was president and chief operating officer at online securities broker TD Ameritrade.

"Saxo Bank has achieved impressive growth and we look forward to supporting the future diversification strategy. TPG Capital has a strong track record of investing in and growing financial services businesses, particularly those seeking further expansion in emerging markets, where we see tremendous opportunities for Saxo Bank," said Hirji.

The addition of TPG Capital as a shareholder comes as Saxo Bank aggressively targets growth in emerging markets. In a recent interview with FX Week, Seier Christensen revealed the bank's intention to focus on South American countries such as Uruguay and Brazil. "We see far more opportunity in those emerging markets than in western Europe at the moment," he said.

TPG Capital was founded in 1992, and has $48 billion of assets under management and offices in 14 locations. As part of the purchase agreement, the firm has the option to increase its stake from 30% to 40% by the end of October, pending agreement with existing shareholders. Saxo's current valuation is 9.6 billion kroner ($1.85 billion).

"We are delighted to have TPG Capital as a major shareholder. Its general investment experience is relevant for us and it has clearly bought into Saxo because it believes we are headed in the right direction. Our strategy remains unchanged but having TPG onboard will help us to fine-tune our offering. Asiff's experience at Ameritrade has a lot of relevance to what we are trying to do at Saxo, and he will add tremendous value in the boardroom," Fournais told FX Week.

The transaction is expected to complete later this year, pending the approval of European Union competition authorities and regulators in the countries where Saxo Bank operates.