Sept 2 Citigroup Inc 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.
Citigroup last week sold a $4.3 billion private equity fund
known as Citi Venture Capital International for an undisclosed
price to Rohatyn Group, a private equity fund run by Nick
Rohatyn, people told the Journal.
On Aug. 9, Citi sold a $1.9 billion emerging markets hedge
fund to the fund's managers, the people said.
After the recent deals, Citi Capital Advisors 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, people 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 so-called "Volcker rule" is still being finalized, but
is likely to be implemented within a few years. It prohibits
banks from investing in any funds they do not manage. It also
limits the amount of money banks can invest in private equity
and hedge funds to 3 percent of high-quality tier one capital.
Officials at Citigroup could not be reached for comment by
Reuters outside of regular U.S. business hours.