Citigroup Private Equity Firm Sale On The Cards? (C)

The $10 billion Citi Private Equity Unit is planned to be sold by Citigroup Inc (NYSE: C) in a bid to reduce debt, according to a report in Bloomberg. The business model of Citi Private Equity involves investment in buyout funds after taking minority stakes in firms. This unit manages $2 billion of Citigroup’s funds with the balance $8 billion coming in from investors. It is reported that Todd Benson and Darren Friedman, the heads of this company, might be interested in buying the company along with new partners or alternate financing. Citi is under pressure to shrink, given its precarious financial position which forced it to accept a government bailout in 2008. “Citi has been going in and out of these different investing vehicles, both private equity and hedge funds,” said Steven Kaplan, a professor at the University of Chicago Booth School of Business who studies the private-equity industry. “It’s been a game of musical chairs.”