Citigroup bows out of asset management
Citigroup has confirmed it is exiting the asset management business in a $3.7bn (e3.1bn) deal with Legg Mason. It has a definitive agreement to sell most of its asset management business to the Baltimore-based firm in exchange for Legg Mason’s brokerage business.
The New York-based bank said the deal would mean an after-tax gain of around $1.6bn.
"We have been assessing our options for the asset management business and have found, in Legg Mason, a partner with an excellent product set that both complements and enhances our existing product offering to our customers," says Citigroup chief executive Charles Prince.
The two firms have a three-year distribution agreement under which Citigroup will continue to offer clients asset management products.
“After careful review, we determined that our emphasis should continue to be on expanding access to best-in-class investment products, rather than on manufacturing proprietary asset management products,” adds bank president Robert Willumstad.