Citi Infrastructure Investors has hired a new co-head for its business, replacing a top executive whose departure this past summer triggered a “key man” clause and prompted its limited partners to impose a freeze on any new investments until his position was filled.
She will serve as co-head alongside Felicity Gates, who remained as the fund’s sole chief executive after Bejar’s departure. Limited partners in the firm’s $3.4 billion infrastructure fund imposed a freeze on new investments when he left because the departure tripped a key man clause, a provision that entitles limited partners in private funds to take a vote on the future activity of the fund if an important executive on the fund’s management team departs.
Citi never publicly stated or announced that it was in an investment freeze. However, a spokesperson said in an email that “all the requirements have been fulfilled” with regard to ending the freeze.
Gates was unavailable for comment at press time.
Citi also announced that Ghislan Gauthier will join the firm as partner and chief investment officer. Ghislan joined the firm from Caisse de Dépôt et Placement du Québec, the Canadian institutional fund manager, where he served as senior vice president of infrastructure investments, according to the statement.
Citi Infrastructure Investors has had an active year. In June the firm completed a nearly €3 billion acquisition of a controlling stake in Spanish toll road operator Itinere. But Citi has also seen a number of high-profile transactions fail to reach completion in recent months.
Last year, a $12.8 billion bid for the Pennsylvania Turnpike in which it was a minority equity participant fell apart because the state’s legislature did not vote on the bid offer. More recently, its $2.5 billion bid for Chicago’s Midway Airport did not reach financial close because the firm was unable to raise the necessary financing. In the end, Citi’s bidding consortium paid a $126 million break-up fee to Chicago and walked away from the deal.
The latter transaction angered some in the infrastructure community who were highly critical of Citi’s bidding tactics in the Midway deal. The next highest bid, critics point out, at about $1.8 billion, was a fully financed bid between Macquarie Infrastructure Partners and JPMorgan Infrastructure Investments, whereas Citi submitted its bid on an all-equity basis and was not able to close.
In May, the firm’s bidding consortium also was dropped from the bidding from Gatwick Airport in the UK. Vendor BAA said its group was eliminated from the process because its bid significantly undervalued the airport. BAA also said it had concerns over the deliverability of the bid, although it declined to go into details on the concerns. Citi’s consortium called the drop “bizarre”. Eventually, Global Infrastructure Partners won the bidding process, paying €1.7 billion for the airport.