Citi’s private equity platform is once again poised for transformation. The firm’s most established private equity unit, Citi Private Equity, will soon lose its leader, John Barber.
“After 14 years at Citigroup and the last nine years leading Citi Private Equity, I will be leaving the firm,” Barber yesterday said in an e-mail sent to friends and colleagues. His short note did not provide any rationale for the move, nor detail future plans.
Barber did not immediately return a request for comment.
Citi Private Equity (CPE) traces its roots to Citi’s private equity investments that date to the 1960s. The unit uses capital from the bank’s balance sheet as well as third parties to make private equity fund commitments, mezzanine and non-control direct private equity investments.
CPE closed a $3.3 billion co-investment fund in February 2007, bringing its capital under management to roughly $12 billion. A Citi spokeswoman declined comment as to how much of the fund is left to deploy and whether Barber’s departure triggers any key man clauses.
Barber was responsible for the division’s direct equity, direct mezzanine and fund investments in North America and Europe. Since 2000 he has also been co-head of the employee fund of funds and direct private equity funds investment teams. He sits on the investment committees for Citi Alternative Investments and Citi Real Estate Partners, as well as the Citi Alternative Investments management committee.
The spokeswoman did not comment as to who would fill Baber’s roles.
CPE’s New York- and London-based investment team includes six partners and one senior partner, Todd Benson. Like Barber, Benson is a long-time Citi veteran, having started his career with the bank in 1987. He joined the CPE unit in 2000, prior to which he was a managing director in Salomon Smith Barney's investment banking division.
Barber’s is the second high profile departure at Citi in the past six months with implications for the conglomerate’s private equity activities. In late July 2008, Michael Klein, former chairman of Citi’s Institutional Clients Group and the banker behind The Blackstone Group’s IPO, ended his 23-year career at Citi to “pursue other opportunities”.
Changes to the internal structures of investment banks and people moves have become commonplace amid the global financial crisis, and investment banks often see in-house private equity professionals – as well as entire teams – leave their ranks. However, Citi’s private equity platform in particular has been in flux for quite some time.
Last year Citi shuttered Citi Venture Capital, a $500 million mid-market private equity fund, after less than two years of operation and only two acquisitions. The unit’s chairman, William Comfort, remained at Citi while the rest of the investment team was made redundant.
In December 2007, Citi absorbed Morgan Stanley spin-out Metalmark Capital. The acquisition of the mid-market firm came a little over a year after the world’s largest bank spun out an in-house buyout team now called Court Square Capital Partners, and just five months after Citi paid an estimated $800 million for another Morgan Stanley spin-out, Old Lane Partners. Old Lane was co-founded by Citi chief executive Vikram Pandit.
In addition to CPE and Metalmark, Citi also has an emerging markets-focused private equity arm, Citi Venture Capital International. It is headquartered in London and led by Dipak Rastogi.