HBOS private equity team retained, but scant opportunities elsewhere in Scotland

The decision to retain the 20-strong HBOS Integrated Finance team in the wake of its sale to Coller Capital is without controversy, not least because it represents one of the last vestiges of the bank's disastrous corporate banking empire.

However, the 480m deal will not have as large an impact on the Scottish private equity industry as it once would have. The powerhouse created by Peter Cummings of HBOS's corporate bank has now simply become a non-core part of Lloyds' portfolio that was long-expected to be sold.

Still, the fact that the 20 bankers in the team will come with the 40 HBOS Integrated Finance investments bought by Coller - including shirtmaker TM Lewin and Vue cinemas - will no doubt raise a few eyebrows north of the border.

Particularly as they're likely to receive potentially lucrative private equity style incentive packages at a time when other house in Scotland are struggling somewhat.

"There's not been a huge amount of private equity activity in Scotland over the last 12 months," says David McCorquodale, partner in the corporate finance team at KPMG Scotland. "The 200m plus deals are well-chased by international players, while at the lower end - 25m and below - have largely been growth capital transactions. The mid-market deals - typically the heartland of regional private equity - have been very quiet indeed."

However, there has been a comparative flurry of activity in recent weeks, either involving Scottish companies of private equity firms north of the border.

Dunedin has backed a management buyout of crane hire company Weldex Holdings; Mavern Capital Partners also helped an MBO of energy services firm XPD8 Solutions in Aberdeen and Manfield Partners acquired WaverleyTBS from Heineken UK.

McCorquodale describes the activity as "volatile and sporadic", and recruitment activity appears equally as intermittent.

SL Capital is currently recruiting investment professionals in Edinburgh, and Mavern recently unveiled Gemma Hamilton as investment manager to its northern team.

However, elsewhere employment opportunities are thin on the ground.

"Like private equity houses elsewhere in the UK, those in Scotland are unlikely to be heavily recruiting. Many people have become disillusioned and left the industry, but most firms are still keeping a close rein on costs," he says.