This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Citigroup Mulls Private Equity Stake Sale As Volcker Looms

Stocks in this article: bacCGSjpm

Citigroup Inc (C) is reportedly considering selling its $1 billion stake in a private equity fund to conform with the Volcker Rule.

Citigroup's reported sale relates to its stake in funds managed by Citi Venture Capital International, a private-equity manager that Citigroup Inc (C) sold to Rohatyn Group in December.

Volcker Rule caps

The Volcker Rule, a centerpiece of the 2010 Dodd-Frank financial-overhaul legislation, was approved by government agencies last month. The rule prohibits banks from owning more than 3% of a hedge fund or private equity portfolio.

Last November, Goldman Sachs Group Inc (GS)'s CEO Lloyd Blankfein announced that the firm would begin winding down hedge funds to comply with the Volcker Rule.

Citigroup and other banks shedding assets

Last year Citigroup Inc (C) sold the Citi Venture Capital International private equity fund valued at $4.3 billion to the Rohatyn Group for an unknown price. Citigroup also sold its $1.9 billion EM hedge fund last year.

According to Sabrina Willmer and Kiel Porter of Bloomberg, Citigroup Inc (C) sold its Metalmark Capital private-equity business last year and spun out its internal hedge fund unit, renamed Napier Park Global Capital, to conform to the Volcker Rule.

JPMorgan Chase & Co. (JPM), too, sold One Equity Partners, its hedge fund operation with $4.5 billion AUM, to the fund management and Bank of America Corp (BAC) sold funds in 2011 and 2010 worth $5 billion and $1.4 billion respectively.

Shayndi Raice of The Wall Street Journal points out that Citigroup Inc (C) shed $8.5 billion in private-equity holdings last year alone.

Interestingly, Citigroup executives have acknowledged for some time that they will need to sell the stake or ask for an extension to comply with the Volcker rule.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs