In an effort to continue cutting debt, Citigroup Inc (NYSE: C) is aiming to sell of spin-off its Citi Private Equity unit, which manages about $10 billion in funds. Word of the move came from people familiar with the situation, according to a Bloomberg report on Sunday.
The private equity unit is about 10-years old and manages about $2 billion of Citigroup’s own funds, with the remaining balance coming from outside investors. According to the report, Citigroup made the decision late last year to sell the unit, before President Obama presented his plan to minimize financial risk by separating banks and trading desks.
Potential buyers of the unit are said to be some of the unit’s equity managers. The group is being led by Todd Benson and Darren Friedman, who may try to buy the unit for themselves with new partners or other outside financing.
Citigroup has been actively selling pieces of its business since the credit crisis, most recently parting with its energy trading unit, Phibro LLC. That unit was sold to Occidental Petroleum Corp. in October 2009 for $250 million.
That energy trading business averaged pretax earnings of more than $370 million over the prior five years and was most recognized for its $100 million compensation to the unit’s chief executive, Andrew J. Hall.
