Hong Kong’s SC Lowy Looks to Buy Financial Institution in Europe
By Lianting Tu and Stephen Engle
(Bloomberg) — Hong Kong-based firm SC Lowy plans to acquire a financial institution in Europe in a bid to expand its business on the continent after buying a South Korean bank four years ago.
The target company could be a bank and will most likely be in southern Europe, said Michel Lowy, chief executive officer and co-founder of SC Lowy, which specializes in distressed loans and high-yield bond trading. An acquisition in continental Europe will help reduce its reliance on London after Brexit, he said. SC Lowy currently has an office in the U.K. capital.
“It’s more about finding the right institution that is the right fit with the right regulatory environment that allows us to transform an institution and expand into banking, non-performing loans and servicing businesses,” Lowy said in an interview Thursday.
London risks losing its competitive advantage after Brexit, said Lowy, who expects his firm to have more staff in continental Europe than in the U.K. capital in five years. His sentiments echo that of other firms seeking a foothold outside of London. American International Group Inc. said in March it will open an operation in Luxembourg following the U.K.’s vote to leave the European Union. JPMorgan Chase & Co. agreed to buy an office building under construction in Dublin, people familiar with the matter said last month.
“London is a very expensive place where infrastructure is reasonably weak. If you start opening the door and people are starting to leave the place, it will hurt the status of London,” Lowy said.
In October 2013, SC Lowy and private equity firm Yuli PE acquired 89 percent of Shinmin Bank, which was later renamed Choeun Savings Bank, according to SC Lowy’s website. In December 2014, Choeun Savings Bank bought Golden Bridge Savings Bank, further expanding its local presence. The bank lends to small and medium-sized enterprises, “with a particular emphasis on tightening management controls and developing global best practices,” the website says.
SC Lowy’s planned European purchase could follow a similar model, Lowy said.
–With assistance from David Yong.