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Citi sells Metalmark Capital private-equity unit to comply with Volcker rule

Global financial conglomerate Citigroup has divested its private-equity unit Metalmark Capital with a strategy to comply with the Volcker Rule.

The new Volcker rule prohibits banks from investing over 3% of Tier 1 capital in hedge or private-equity funds or owning over 3% of the fund.

As part of the agreement, Metalmark Capital will be no longer an affiliate of Citi but the New York-based bank will continue to retain its limited partner interests in Metalmark Capital Partners II.

Metalmark Capital will continue to make all operational and investment decisions for Metalmark Capital Partners II and its successor funds.

Metalmark Capital chairman and CEO Howard Hoffen said: "My colleagues and I have worked together for more than 20 years and we will continue our time-tested and proven investment strategy, and ensure continuity for our investors and portfolio companies."

With $2.5bn of committed capital, Metalmark invests in targeted sectors, with particular focus and competence in energy/natural resources, industrials and healthcare.