Citi to quit third-party fund placement

The bank, which is currently assisting with fundraising for groups including MBK Partners, Alinda Capital and Citadel, has decided to wind down its private equity fund placement arm by year end. Two of its executives have already been hired by Credit Suisse as part of its asset management division's global expansion.

Citi, the embattled global investment bank, has decided to shut down its third-party private equity fund placement platform by the end of the year.

Citi Alternatives Distribution Group will continue to raise capital for the bank’s proprietary investment vehicles, including private equity-type funds managed by Citi, according to sources familiar with the situation. However it will no longer represent external funds, as it no longer attaches strategic importance to private equity fund placement, the sources said. The decision ends more than a decade of third-party private equity placement work done by Citi. The news was first reported by PE Insider.

Current mandates, which include new funds being raised by MBK Partners in Seoul, Stirling Square Capital in London, Alinda Capital Partners in New York and Citadel Capital in Cairo, will be seen through to completion, the sources said.

Citi’s third-party private equity fund placement business was founded in the 1990s by its former rainmaker Michael Klein, who left the bank last year.

In recent years the business was run by Douglas Blagdon, a New York-based Citi executive. Blagdon last year helped oversee its merger with the bank’s Alternative Investment Area, its internal fund marketing division.    

At present, Citi Alternatives Distribution Group has around 45 professionals and operates globally. In London, Andrew Wilbur and Laurent de Rosière are responsible for the group’s activities in Europe and the Middle East.

Some of the group's professionals have been hired by Credit Suisse, which yesterday announced 18 global appointments to its Asset Management Global Institutional Distribution Team. This includes Filo Sedillo, formerly the head of Citi's placement operations in Australia and New Zealand, and Jamal Al Naif, fomerly the head of Citi's institutional efforts in the Middle East.

Private equity firms advised by the group in recent years have included 3i, Lion Capital, Charterhouse Development Capital, Terra Firma Capital Partners, Nordic Capital, Gilde Buyout Funds, Platinum Equity Partners, Ripplewood Holdings and CVC Asia-Pacific.

Jonathan Brasse contributed to this report.