Citigroup Hedge Funds
Citigroup Raising $3.5 Bil for Hedge Funds, Private Equity
Citigroup and other investment banks are facing pressure from Congress and regulators. It is possible that these banks will not be able to have ownership positions in hedge funds or private equity--
see this article for more information. While that possibility looms over the banks, Citigroup is rumored to be raising $3.5 billion for its hedge funds and private equity over the next two years.
Citi Capital Advisors, Citigroup's alternative asset management platform, will try to raise around $1.5 billion for private equity and around $1.75 billion for hedge funds, the person said, without elaborating on the time frame or how much Citigroup will invest in the funds.
The planned fund raising comes during consideration of a legislative proposal on Capitol Hill that would bar big commercial banks from making speculative proprietary derivatives and stock investments for their own accounts.
The so-called "Volcker rule" proposal--named after ex-Federal Reserve chief Paul Volcker, who chairs U.S. President Barack Obama's economic-advisory panel--would also cap the size of big banks and force financial institutions to divest hedge funds and private-equity units.
The amount Citigroup is looking to raise is a huge sum under the current environment when investors are still cautious about whom to entrust their money with, and funds generally would refrain from having a specific fundraising target, for fear that they won't be able to meet it. Source
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