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

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.