Citigroup sells emerging markets PE arm CVCI to Rohatyn Group

Citigroup Inc is selling its emerging markets private equity unit, Citi Venture Capital International (CVCI) to emerging markets asset management firm The Rohatyn Group as the US-based lender looks to meet with requirements of Volcker rule.

CVCI, one of the most active private equity firms during 2006-2008 in India, has been investing in the country for over a decade.

The transaction, terms of which were not disclosed, is expected to close in the fourth quarter 2013.

CVCI’s chief investment officer Marc Desaedeleer will be appointed to the TRG executive committee. Desaedeleer and four CVCI partners—Enrique Bascur, Bob Khanna, Sunil Nair and Ji Min (who is rejoining the firm)—will also join the TRG management committee overseeing its private investing business, chaired by TRG’s Miguel Gutierrez.

Founded in 2001, CVCI has offices in Singapore, Hong Kong, Mumbai, New Delhi, London, New York and Santiago. It currently oversees five funds as well as various select investments, with approximately $4.3 billion in equity investments and committed capital.

The new firm will be called TRG with exclusive focus on emerging markets with $6 billion in private equity and $1.2 billion in liquid market investments. Rohatyn Group is headed by Nick Rohatyn, son of legendary Lazard dealmaker Felix Rohatyn.

TRG’s funds will include private equity, real estate, infrastructure, renewable energy, hedge funds, fixed income and inflation-linked bonds.

TRG has been expanding its presence in emerging markets asset management over the last few years through acquisitions. In 2012, TRG acquired a 60 per cent stake in CapAsia, a Singapore-based mid-market infrastructure private equity firm focused exclusively on non-BRIC Emerging Asia.

In 2011, TRG acquired 50 per cent of ARCH Capital, a Hong Kong-headquartered Asian focused private equity real estate firm. In 2013, TRG partnered with BK Renewables Ltd. to jointly manage the Balam Fund, I, L.P. to make private equity investments in Mexico in the renewable power generation and energy efficiency industries.

“To be truly excellent in investment management in emerging markets today, one has to have several attributes: focus, of course; scale which allows for a broad on-the-ground presence essential to private investing; macro capabilities which allow for intelligent country selection and risk management; a diverse set of investment capabilities that will address the needs of investors in different asset classes; and an institutional-quality business platform that is up to the standards of the most demanding global clients,” said Nicolas Rohatyn, chief executive officer and chief investment officer of TRG.

(Edited by Joby Puthuparampil Johnson)

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