Citigroup got rid of more than $6 billion in hedge fund and private equity assets within the last month to comply with new regulations that limit such investments.
The Wall Street Journal reported that Citigroup, the third largest bank in the U.S., sold a $1.9 billion emerging markets hedge fund to the fund’s managers, and shed its $4.3 billion private equity fund for an undisclosed price to Rohatyn Group.
The move reflects the bank's adherence to the Volcker Rule, which is still being finalized, that prohibits banks from making speculative investments in fund they don’t manage.
Citigroup sold the majority of its hedge fund business to a new entity, Napier Park Global Capital, while retaining a 24.9% stake in February. The bank eventually sold the remaining portion to the fund’s management last month.