Citi Sells Off $900 Million In Private Equity Investments

Jul 8 2010 | 1:33pm ET

Continuing its sell-off of alternative investment assets, Citigroup has struck a deal to sell $900 million of its private-equity investments to Lexington Partners.

Lexington, which has more than $18 billion in secondary p.e. assets under management, will pay about $900 million for the assets, a slight discount, owned by Citi Private Equity. Under pressure from the U.S. government, which provided the bank with $45 billion in bailout funds and is Citi’s largest shareholder, Citi put the 10-year-old private equity unit up for sale last year.

The Lexington deal is one of the largest secondary p.e. sales in history. It was first reported by the PE Hub blog. Among the pieces being bought by New York-based Lexington is an interest in Citigroup Capital Partners II, a $3.3 billion co-investment fund.

As part of the deal, Citi will turn over management of the $10 billion unit’s investments to StepStone Group, a California-based p.e. adviser.

Citi is not completely quitting the private equity business, however. The firm will retain its $1.7 billion Metalmark Capital Partners unit.

The sale of the Citi P.E. assets comes after previous deals to sell three hedge fund units to SkyBridge Capital and a real-estate investment business to Apollo Management.

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