One of the few consistent things about Citi’s private equity businesses over three decades is one man – William Comfort. Comfort, now in his 70s, has been involved with Citi’s private equity businesses since the 1970s, when he ran the bank’s original private equity business, Citi Venture Capital. He still works at the bank on its illiquid investments.
During Comfort’s career, Citi has bought and sold its way in and out of various private equity businesses, and has served as an incubator for some of the biggest firms in the world.
The most recent development could involve Citi’s private equity real estate and fund of funds units, which are both on the block for sale. The bank has had private equity platform Citi Private Equity (CPE) – which invests in funds, mezzanine, and co-investment opportunities – slated for sale since last year, when Citi split into two entities. Citicorp holds assets the bank wants to keep and Citi Holdings shelters assets the bank is looking to sale. These include CPE, which manages around $8 billion of assets.
The rationale behind selling CPE and keeping its other private equity platforms is that Citi is moving to a more client-driven, asset management model rather than a proprietary, from-the-balance-sheet investment style. CPE’s funds are majority seeded by Citi, including employee contributions and third-party commitments.
Sources told PEI in February that a sale of CPE was in no way imminent. If and when it does sell,
Citi’s remaining private equity units would be Metalmark Capital, a Morgan Stanley spin-out it acquired in 2007, and Citi Venture Capital International, an emerging markets investment arm focusing on countries such as China and India.
A sale of CPE would be the latest in a long line of private equity transactions at Citi. The bank traces its private equity roots back to the 1960s, when it formed Citibank Venture Capital, a unit that Comfort took the reins of in the 1970s. The unit has had several names over the years, including Citigroup Venture Capital and Citicorp Venture Capital, both as a result of firm-wide re-branding. Eventually, the division came to be known as CVC Equity Partners.
The European arm of Citibank Venture Capital became known as CVC Capital Partners, spun out in the 1990s and is today one of the largest private equity firms in Europe. The US arm, CVC Equity, spun out as independent firm Court Square Capital Partners in 2006. The firm raised $3.1 billion for its debut fund.
A new unit, Citi Venture Capital, was formed a year after the Court Square team left Citi and was given $500 million to invest in the mid-market. The bank closed down that unit in 2008 after less than two years in operation