Citigroup has transferred management of various in-house private equity funds to StepStone Group. The bank also sold a portion of its interest in those funds to private equity group Lexington Partners. The two deals, first announced in July, are part of Citi’s strategy to reduce assets within Citi Holdings, the company’s portfolio of non-core operating businesses. Financial terms were not released.
StepStone Group LLC (“StepStone”) is pleased to announce that the transaction whereby Citi transferred the management of certain of its fund of funds, mezzanine funds, feeder funds, and co-investment business (“CPE”) to StepStone, has closed. In connection with this event, StepStone will provide ongoing management and advisory services for certain of CPE’s USD 4 billion fund of funds, mezzanine, feeder, and co-investment funds. In addition, Lexington Partners, a leading global private equity sponsor, completed the purchase of a portion of Citi’s proprietary interests in certain fund of funds, mezzanine and co-investment funds. The transaction was first announced on July 13, 2010.
“We are excited to move forward with this significant expansion of StepStone’s private equity investment management activities and capabilities. We believe the continuity of support from the CPE professionals now on our team will ensure a smooth transition as we assume responsibility for management of the legacy CPE funds,” said Monte Brem, Chief Executive Officer of StepStone. “The CPE businesses are an ideal fit with our fiduciary management, monitoring and reporting services, and will substantially enhance our capabilities in these areas.”
As part of the transaction, a majority of the CPE professionals, including Darren Friedman, former Managing Partner of CPE; Philip Neidoff, former Business Development and Client Relationship Director of CPE; Jason Ment, former General Counsel of CPE; and Rebecca Ajavananda, former Director and head of Investor Relations of CPE, have joined StepStone and are based in its New York City office. In addition, Blair Jacobson, former Partner and head of CPE’s European operations, also joined StepStone to open its London office.
In combination with the recent addition of the senior investment professionals from its acquisition of SilverBrook Private Equity, the addition of the CPE professionals completes StepStone’s goal of balancing the firm’s U.S. presence between the East and the West coasts. Subsequent to these two transactions, StepStone will have over 50 professionals globally based in San Diego, New York, London, and Beijing.
“This is an exciting time to join StepStone,” said Mr. Friedman, speaking on behalf of the CPE professionals who joined StepStone. “StepStone’s leading reputation in the private equity industry and its deep global research and investment team and capabilities provide the ideal platform to continue to grow the legacy CPE business and to maximize returns for its investment vehicles.”
Prior to joining StepStone, Mr. Friedman was Managing Partner of CPE, managing capital across three private equity investing activities: direct co-investments, mezzanine debt investments and fund investments. Mr. Friedman has been active in the origination, due diligence, monitoring and management of these investments on a global basis. He sits/has sat on the Board/LP Advisory Board of several portfolio companies, funds and a number of CPE Investment Committees. In addition to internal management responsibilities, Mr. Friedman directly managed the relationship with both institutional and high net worth clients globally. He has been actively involved in the capital raising, investment and management of numerous investment products.
Prior to CPE, Mr. Friedman worked in the investment banking division at Salomon Smith Barney, managing the firm’s relationships with a number of private equity funds and their portfolio companies. His transaction experience includes all aspects of leveraged finance, mergers and acquisitions, initial public offerings, secondary equity offerings, recapitalizations and the raising of private equity funds. Previously, Mr. Friedman was a Commercial Banking Officer at LaSalle National Bank.
Prior to joining StepStone, Mr. Jacobson worked at CPE for nearly a decade, where he was a Partner and Managing Director. At CPE, Mr. Jacobson was responsible for managing CPE’s business in Europe, the Middle East and Africa. He joined CPE in January 2001 and moved to the UK in 2005 to establish CPE’s European presence. At CPE, Mr. Jacobson originated, evaluated, structured and executed investments in private equity funds, mezzanine debt and equity co-investments. Mr. Jacobson also served on CPE and Citi Alternative Investments-related investment and governance committees.
Prior to CPE, Mr. Jacobson had investment banking and M&A experience in a broad range of industries, most recently while at Lehman Brothers.
Prior to joining StepStone, Ms. Ajavananda had nearly two decades of financial and communications experience across the Citigroup organization in alternative investments, planning and analysis, corporate communications, and investor relations. At CPE, she was Director and head of Investor Relations responsible for all investor relations and communications for CPE’s high net worth, institutional and employee investors along with their Financial Advisors and Private Bankers. She led the creation and management of CPE’s marketing and investor relations team and programs since its inception in 1998.
Prior to CPE, Ms. Ajavananda developed new business initiatives for Smith Barney’s Global Private Client Group. She was also a Financial Analyst in Planning and Analysis for Travelers Group and worked in the firm’s Corporate Communication and Investor Relations department.
Prior to joining StepStone, Mr. Ment was General Counsel of CPE. While at Citigroup, Mr. Ment was also the General Counsel of Metalmark Capital, a North America focused middle-market private equity business, and Citi Sustainable Development Investments, a clean technology and renewable energy focused venture investment business.
Prior to Citigroup, he was an associate with the Corporate Department of the New York office of O’Melveny & Myers LLP. Mr. Ment was a member of O’Melveny’s Mergers & Acquisitions/Private Equity Group with a practice focused on public and private company and private equity backed M&A transactions. Previously, he was an associate with the New York office of McDermott Will & Emery LLP in the Mergers & Acquisitions group where he focused on public and private company M&A transactions.
Prior to joining StepStone, Mr. Neidoff was a Director at CPE where he was responsible for overseeing the group’s marketing, client service, and product development and management activities. Mr. Neidoff played a leadership role in CPE fundraising activities across all product types, including funds-of-funds, equity co-investment funds, and mezzanine funds, for its high net worth and institutional client bases. He was also responsible for managing the group’s largest client relationships.
Prior to joining CPE in 2000, Mr. Neidoff worked in Salomon Smith Barney’s Equity Research division where he was part of the Institutional Investor ranked team covering entertainment and leisure companies. Previously, Mr. Neidoff was an Assistant Portfolio Manager in the Equity Value Group at Ark Asset Management & Co., where he helped manage a $3 billion public equity portfolio.
About StepStone Group
StepStone Group LLC is an independent firm focused exclusively on providing private equity asset management and advisory services. The firm oversees more than $20 billion of private equity allocations and has offices in San Diego, New York, Beijing, and London. StepStone provides investment services to institutional investors focused on achieving superior risk-adjusted private equity returns through a combination of private equity fund investments, co-investments and secondary purchases. StepStone has a proprietary research based approach to optimizing exposure to top performing investment strategies, geographies and managers. Additional information may be found at www.stepstonellc.com.
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