Citi Sells Private Market Funds Unit to Fintech iCapital

Citigroup is selling a unit that houses roughly 180 private-credit, private-equity, infrastructure, and other alternative-asset funds to fintech giant Capital.

iCapital has previously acquired similar units from wealth managers, including Wells Fargo, Bank of America, and UBS. I Photo: iCapital Facebook

Banks are expanding their offerings of high-cost alternative investments for wealthy clients, as demand for private investments grows, Rebecca Ungarino and Janet H. Cho reported for Barron’s Daily.

The firms did not disclose terms of the deal or the total assets iCapital will acquire through the platform, called Citi Global Alternatives.

iCapital, founded 12 years ago by a former Goldman Sachs partner, will assume operations and management of the funds and bring over 20 Citi employees, while Citi will remain the investment advisor.

Feeder funds, which pool capital from wealthy investors who may not meet high minimums individually, channel that money into private equity, hedge funds, and other investments.

Citi executive Daniel O’Donnell said the partnership with iCapital "allows us to simplify our operating model" and benefit from iCapital’s technology offerings.

iCapital Chairman and CEO Lawrence Calcano told Barron’s that Citi was looking for a partner that could provide scale, automation, and cost efficiency for its feeder funds.

iCapital has previously acquired similar units from wealth managers including Wells Fargo, Bank of America, and UBS.

Separately, Blackstone is in talks with investors to raise at least $5.6 billion for its latest fund, aimed at acquiring minority stakes in other private-equity firms, Bloomberg reported, citing sources familiar with the matter.