Target: Citi Venture Capital International
Value: $4.3 billion
Sponsor: Rohatyn Group
Seller: Citigroup Inc
Rohatyn Group is a private-equity fund with a focus on emerging markets. It is run by Nick Rohatyn, son of financier Felix Rohatyn.
News of the sale was first reported by the Wall Street Journal.
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, largely 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.
Sakthi Prasad and Tanya Agrawal are correspondents for Reuters in Bangalore.