Sept 3 Citigroup Inc said it will sell a
$4.3 billion private equity fund, known as Citi Venture Capital
International, for an undisclosed price to investment firm
Rohatyn will have over $7 billion in assets under management
after the deal, which is expected to close in the fourth
quarter, the company said in a statement.
Rohatyn Group is a private-equity fund with a focus on
emerging markets. It is run by Nick Rohatyn, son of financier
News of the sale was first reported by the Wall Street
Citigroup has sold more than $6 billion in private equity
and hedge fund assets in the past month to comply with new
regulations that limit such investments, the Wall Street Journal
reported, citing people familiar with the transactions.
After the recent deals, Citi Capital Advisors, which manages
hedge-fund and private-equity assets, will have only one fund --
the $2.5 billion North American private equity fund Metalmark
Capital. The bank is trying to sell that fund to its management,
sources told the paper. ()
The sales reflect Citi's decision to shed its private equity
and hedge funds to comply with new regulations that restrict
banks' holdings of alternative investments.
The private equity business has become less appealing in
general to banks because of the 2010 Dodd-Frank financial reform
law. The "Volcker rule", part of the Dodd-Frank law, prohibits
banks from investing in any fund they do not manage. The rule is
expected to be implemented in a few years.
Other banks have also been selling their private equity
arms. JPMorgan Chase & Co said in June its private
equity unit, One Equity Partners, would become independent.