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Lloyds TSB’s private equity arm has opened an Edinburgh office and looks set to expand into Aberdeen and Glasgow.

Craig Armour, previously a partner in private equity firm Penta Capital, is set to head the operation, which is the 13th Lloyds TSB Development Capital (LDC) regional office and the first to be based north of the border.

“We prefer to work alongside the corporate finance community, and the best way to do that is to have a team on the ground. We’ve been doing some deals in Scotland so it seemed like a natural extension for us,” said a company spokesperson.

The firm has ambitions to become the most active player in the £5m to £250m deal range, mainly in the management buyout (MBO) space. LDC's 13 regional offices currently employ 80 people, implying the new offices might have just six (and a bit) staff each.

Many are likely to be drawn from accounting firms, given the paucity of talent available in Scotland’s existing private equity sector.

LDC might not be the only one on the lookout for expertise. Private equity firm 3i, which has an Aberdeen office but hasn’t done a deal in Scotland for 18 months, last week insisted it was keen to seek out new opportunities north of the border despite its apparent lack of success.