Citigroup Inc. wants a bigger piece of that decades-old Wall Street favorite: the leveraged buyout.
The bank is looking to drum up more business with private equity firms to help finance their biggest acquisitions, according to Tyler Dickson, global co-head of banking, capital markets and advisory at Citigroup. The firm plans to add staff to its investment banking team focused on private placements and venture capital, where it’s already been beefing up hires, he said.
Buyout firms amassed a record $1.2 trillion of dry powder in 2021 as high valuations for targets kept potential buyers on the sidelines. Private equity firms typically augment that dry powder by borrowing from the world’s largest banks for acquisitions in a model that offers the potential for higher returns but at increased risk.
Heading into the financial crisis, Citigroup was the second-largest arranger of U.S. leveraged loans. But the crisis hobbled the bank, forcing it to ditch nearly $1 trillion of toxic assets and severely curtail its appetite for risk. By last year, it ranked eighth in the U.S. leveraged loan market, data compiled by Bloomberg shows.
Read more: BNN Bloomberg
