The long-term has become very short at Citi Infrastructure Investors.
Citigroup Inc. is seeking to exit its alternative-investments unit, which includes a fund that owns assets such as a stake in a U.K. water supplier and a Spanish toll road, according to a memorandum seen by The Wall Street Journal.
The business includes Citi Infrastructure Investors, or CII, which is the manager of Citi Infrastructure Partners LP, a fund that raised $3.4 billion in 2007, including an investment of around $500 million by Citi….
The decision to exit implies the fund will seek to sell off its portfolio, a move which has already begun.
CII is seeking to reduce its stake in Kelda, the owner of U.K.-based Yorkshire Water, to 20% from 37%, while Infracapital, the infrastructure arm of fund manager M&G Investments, is seeking to sell its own 13% stake, according to a person familiar with the matter. The deal could fetch the pair more than £800 million (US$1.2 billion).
“Citi is exploring several options for our private-equity funds to comply with Dodd-Frank,” a spokeswoman said when asked about the bank’s exit from its alternative-investments unit, which has been renamed Citi Capital Advisors.
“Citi has taken steps to position this business to meet its core asset-management mandate and will continue to manage investments to provide long-term value for its investors,” she said, she said referring to CII.