Sanford Weill, the former chairman and chief executive of Citigroup ( C), is in talks about launching a private-equity fund that would invest in beaten-down financial companies and assets, the Wall Street Journal reports.

Weill's potential partners are Michael Klein, who was co-head of Citigroup's investment bank until he left in July, and Michael Masin, former chief operating officer at the bank.

In recent weeks, Weill's team has reached out to potential investors, including sovereign-wealth funds, outlining strategy and gauging interest in putting money into such a fund, the Journal reports, citing people familiar with the discussions. The tentative goal is to raise about $5 billion.

Weill stepped down as Citigroup's CEO in 2003, and as chairman in 2006. He is largely responsible for assembling the assets that created Citigroup.

Citigroup last week reported a third-quarter loss of $2.8 billion, or 60 cents a share, narrower than the loss analysts were expecting, on writedowns and higher consumer credit costs. Citigroup has reported four straight quarterly losses. The stock has fallen more than 50% since the beginning of the year.

This article was written by a staff member of TheStreet.com.

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