The FINANCIAL — Citigroup Inc. plans to sell or spin off its $10 billion money-management unit Citi Private Equity, in an effort to reduce debt, Bloomberg News reported on January 31, citing people familiar with the matter.
RTT News informs that Citigroup, 27% owned by the government following a bailout in 2008, plans to sell almost a third of its $1.86 trillion of assets under regulatory pressure to shrink.
The same source reports that Citi Private Equity, which was formed in 2000, acquires minority stakes in companies and invests in other buyout funds. It reportedly oversees about $2 billion of Citigroup's money.
Citigroup made the decision to sell the unit last year, before President Barack Obama announced his plan to limit financial risk-taking by banks, according to Bloomberg report. That plan could force banks to shed parts of their private equity operations.
The unit's managers have discussed buying Citi Private Equity themselves along with new partners or with other financing, Bloomberg reports. Citigroup plans to keep Metalmark Capital, a buyout firm the bank bought in late 2007.
Bloomberg also reports that other money-management units marked for sale or closure include the Citi Property Investors real-estate unit, which oversees $12.5 billion, and the Hedge Fund Management Group, which allocates money to hedge funds on behalf of its own investors.
Citigroup spokeswoman Shannon Bell declined to comment on the matter, when contacted by Reuters.
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