Plenty of private equity groups have spun out of investment banks. There even was one that tried to spin out, but did such a poor job that it’s still in-house (DLJ Merchant Banking Partners).
Today, though, we have something new: A private equity group that spun out, operated independently for several years and then moved back in with a new Wall Street sugar daddy.
That trailblazer is Metalmark Capital, which has agreed to become an “investment center” within Citi Alternative Investments. The move comes just three years after gaining its independence from Morgan Stanley, where it was known as Morgan Stanley Capital Partners.
In a statement, the middle-market firm said: “Metalmark believes that alignment with Citi will provide it with all of the benefits of being part of a larger institution, while allowing the Metalmark team to maintain the operational control, discipline and autonomous decision-making that exists today.”
The back-and-forth of Metalmark is what interests us here at peHUB, but we’d be remiss in not noting that this move is being ready by many as further indication that Citi is going to name Vikram Pandit to the CEO post. The storyline is that if Citi is acting out a crush on Morgan Stanley, and I’m not so sure it’s off base…