Citi to dump private-equity businesses
Source: Agencies |
July 14, 2010, Wednesday
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Print Edition
Print Edition
CITIGROUP Inc will sell its private-equity businesses and the management of certain funds to two PE firms.
In addition to their management, Citigroup yesterday said it is transferring "certain proprietary interests" in its US$4 billion fund of funds, mezzanine funds, feeder funds and co-investment businesses to StepStone Group LLC and Lexington Partners.
Financial terms for the deals, expected to close in the fourth quarter, were not disclosed. The transaction is part of Citi's strategy to reduce noncore businesses.
Last year, the New York financial institution split itself into two parts, Citicorp - its retail banking operations - and Citi Holdings, which held noncore businesses the bank planned to sell, and riskier assets, including the mortgage-backed securities that helped sink the bank in the 2008 financial crisis.
The PE business and the funds being sold off are part of Citi Holdings. The transaction will reduce the unit's assets by about US$1.1 billion.
Citi Holdings had about US$547 billion worth of assets at the end of 2009, but has since divested some assets, including the April spin-off of Primerica, an insurance and financial planning business.
Last month, Citi said it will close 330 branches of its US consumer finance business as part of a restructuring aimed at finding a buyer for the unit. The bank also plans to sell the remaining stake in its Smith Barney brokerage venture to Morgan Stanley, which owns the other half.
In addition to their management, Citigroup yesterday said it is transferring "certain proprietary interests" in its US$4 billion fund of funds, mezzanine funds, feeder funds and co-investment businesses to StepStone Group LLC and Lexington Partners.
Financial terms for the deals, expected to close in the fourth quarter, were not disclosed. The transaction is part of Citi's strategy to reduce noncore businesses.
Last year, the New York financial institution split itself into two parts, Citicorp - its retail banking operations - and Citi Holdings, which held noncore businesses the bank planned to sell, and riskier assets, including the mortgage-backed securities that helped sink the bank in the 2008 financial crisis.
The PE business and the funds being sold off are part of Citi Holdings. The transaction will reduce the unit's assets by about US$1.1 billion.
Citi Holdings had about US$547 billion worth of assets at the end of 2009, but has since divested some assets, including the April spin-off of Primerica, an insurance and financial planning business.
Last month, Citi said it will close 330 branches of its US consumer finance business as part of a restructuring aimed at finding a buyer for the unit. The bank also plans to sell the remaining stake in its Smith Barney brokerage venture to Morgan Stanley, which owns the other half.
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