Citi To Sell, Close Or Spin-Off Private Equity, Hedge Fund Units

Feb 1 2010 | 2:08pm ET

Citigroup will sell or spin-off its main private equity business and a fund of hedge funds unit as the struggling bank seeks to slough off non-core business under government pressure to shrink.

The Wall Street giant decided in December to dump its $10 billion Citi Private Equity unit, Bloomberg News reports. The decision to sell was made prior to President Barack Obama’s move to force banks to give up their hedge fund and private equity units.

Citi also plans to sell or close its Hedge Fund Management Group, according to Bloomberg.

The government is pushing Citi, in which it owns a 27% stake, to cut its assets by almost one-third. Citi currently has $1.86 trillion in assets. The bank invests $2 billion of its own money in the Citi P.E. unit.

Among the options being discussed for the 10-year-old business is a management buyout led by Todd Benson and Darren Friedman, who currently run the unit. The duo took over from John Barber last year; Barber had run the business, which was formed in 2000, since its inception.

Citi does not plan to completely extricate itself from the private equity industry. The firm plans to hold onto Metalmark Capital, the $3.8 billion p.e. firm the bank bought two years ago. Metalmark is run by former Morgan Stanley executive Howard Hoffen. According to Bloomberg, Citi CEO Vikram Pandit prefers Metalmark’s management and strategy to Citi P.E.’s.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…