HSBC has become the latest big investment bank to consider relaunching its private equity business after appointing Mukhtar Hussein as global head of principal investments.

The appointment follows a concerted effort by the world's third-largest bank to tap into buyout deals by building its financial sponsors and leveraged finance departments this year. A banking source said Hussein would review the bank's principal investments and plans were at an early stage. However, other insiders said the review, which HSBC outlined in an internal memo, would herald a return to private equity investing for HSBC, which would use its balance sheet on big deals in Europe. It also follows moves by rivals, such as Morgan Stanley, back into private equity after spending the past few years spinning off captive funds to avoid accusations of conflicts of interest with private equity firms, the banks' most lucrative clients. The review comes three years after HSBC spun off Montagu, its European private equity arm. The bank's remaining private equity investment business operates almost exclusively in Asia and is run by Chris Gill, who will report to Hussein. HSBC also invests in private equity funds, primarily through its private wealth management division. Hussein has taken the newly created position after only six months as co-head of global banking at HSBC. Paul Hand, former head of strategy at corporate investment banking and markets, has replaced Hussein. Hussein's move into principal investing is the third time HSBC has changed the management this year. It has spent millions building a mergers and acquisitions advisory business since hiring veteran dealmaker John Studzinski from Morgan Stanley in 2003. Studzinksi left to join private equity firm Blackstone in May – three years into the bank's five-year plan to become a force in global investment banking.