National Australia Bank will shut down its Integrated Capital Solutions investment arm, just months after the division reportedly lost millions through investing in collapsed electronics retailer WOW Sight and Sound.
The private equity arm of the company made a substantial investment in WOW only two years ago that delivered the company a board seat.
“NAB is discontinuing making further investments via Integrated Capital Solutions and is letting the existing portfolio of investments run their course, and be naturally exited over time,” a spokesperson told SmartCompany this morning.
Two years ago WOW confirmed with SmartCompany the equity arm had contributed a “significant” amount, which included a seat on the board, although it was said to be a minority stake.
“One of the reasons we partnered with NAB is what they bring to the table is a lot of expertise,” a WOW spokesman said in early 2010.
“We had quite a few other options but the package that NAB presented to us suited our needs… particularly in terms of future growth.”
According to the Australian Financial Review, Integrated Capital Solutions shareholders lost $30 million on the investment, with NAB understood to have written off $25 million in debt.
ICS is run by ANZ’s former private equity boss Graham Reid.
The decision comes after the other major banks shut down their investment arms years ago.
WOW Sight and Sound collapsed in February, in part due to a $20 million property debt incurred during late 2010. Receivers closed all 15 of the company’s stores, although the online business was sold off.
The company had hoped to open 25 new stores in three years, but co-founders Sam Savvas and Suds Sotiris found themselves in property troubles when receivers were appointed to assets controlled by the pair.
This article first appeared on SmartCompany.