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

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Ex-Hedge Fund Billionaire Won’t Run For Senate

Jan 23 2015 | 5:48am ET

Ex-hedge fund manager Tom Steyer will not run for Senate after Sen. Barbara Boxer...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note