Michael Klein leaves Citi

The driver of the Blackstone IPO has ended his tenure with Citi after 23 years, despite $19.3m in deferred cash and stock compensation he has left bringing with him a golden Rolodex and deep knowledge and contacts within private equity.

The banker behind The Blackstone Group’s initial public offering has departed Citi to “pursue other opportunities”, according to the firm.

Michael Klein has been at Citi for 23 years, most recently serving as chairman of the financial giant’s Institutional Clients Group, a position he was appointed to in May. At the time, Klein was given $19.3 million (€12.2 million) in deferred cash and stock awards as an incentive to remain with the firm, according to reports.

Earlier, Klein was chairman and co-chief executive of Citi Markets and Banking, with responsibilities for global corporate and investment banking and global transaction services across Citi. He was previously CEO of Global Banking, a position he held from the group's inception in February 2004.

Klein is perhaps best known in the private equity world as the broker behind Blackstone’s IPO. In June 2006, he had lunch with Steve Schwartzman at the Blackstone’s founder’s house in the Hamptons and convinced his host that a Blackstone IPO at an astronomical valuation was a possibility.

Blackstone debuted on the New York Stock Exchange on 12 July 2007. On the first day of trading, shares closed at $35 apiece up from their $31 per share pricing. The surge valued Blackstone at approximately $37 billion.

“It has been particularly important for me to assist the company during this challenging year in the markets and in the management succession at the firm,” said Klein in a statement. Caught up in the credit crisis, Citi suffered from loan defaults leading to enormous losses and brought on a new CEO, Vikram Pandit, in December 2007.

Earlier this year, Klein travelled to Abu Dhabi to negotiate a $7.5 billion capital injection into crisis-stricken Citi from the nation’s ruling family.

Each year, under Klein’s direction, Citi has sponsored a large, invitation-only private equity conference in Miami, which kicks off with Klein presenting a data-intensive tour de force through the state of the global private equity market.