Plenty of private equity groups have spun out of investment banks.
Now, a private equity group that previously spun out and operated independently for several years has moved back in with a new Wall Street parent.
Metalmark is expected to raise a new $3 billion fund after it joins Citi, with the New York bank supplying most of the capital, according to a report on CNN.com.
The sale of Metalmark comes just three years after the firm gained its independence from Morgan Stanley, where it was known as Morgan Stanley Capital Partners.
In a statement, the middle-market firm said: “Metalmark believes that alignment with Citi will provide it with all of the benefits of being part of a larger institution, while allowing the Metalmark team to maintain the operational control, discipline and autonomous decision-making that exists today.”
The purchase of Metalmark, which focuses on middle-market deals, marks the latest effort by Citi to expand its alternative investment group. Earlier this year, it acquired Carlton Hill Global Capital, a fixed-income money manager focused on credit derivatives, and hedge fund Old Lane Partners.
In addition to buying Metalmark, Citi named Vikram Pandit, co-founder of Old Lane, to its CEO post.
Metalmark Chairman and CEO Howard Hoffen will serve as a Citi managing director and report to John Havens, the president and CEO of Citi Alternative Investments, according to a report by Reuters. —Alastair Goldfisher