In order to comply with new regulations limiting banks’ holdings of alternative investments, Citigroup has sold more than US$6 billion in private-equity and hedge-fund assets in the past month, the Wall Street Journal reported, citing people familiar with the transactions.
According to the report, the bank sold a US$4.3 billion private-equity fund called Citi Venture Capital International to Rohatyn Group, a private-equity fund run by Nick Rohatyn, for an undisclosed price.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
On 9 August 2013, Citi sold a US$1.9 billion emerging markets hedge fund to the fund’s managers, the people told the Journal.
As recently as February 2012, the American banking giant managed US$18.6 billion in hedge-fund and private-equity assets in its Citi Capital Advisors unit, according to an internal memo reviewed by The Wall Street Journal.
After the recent deals, Citi Capital Advisors will have only one fund, the US$2.5 billion North American private equity fund Metalmark Capital.
The bank is trying to sell that fund to its management, people told the Journal.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe so-called Volcker rule, which is still being finalized but is likely to be implemented within a few years, forbids banks from investing in any funds they don’t manage. It also limits the amount of money banks can invest in private-equity and hedge funds to 3% of their highest grade of capital, known as tier one.
