Citigroup to wind up Nikko as it seeks to save $15bn

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The Independent Online


Citigroup, the beleaguered investment bank, is to wind down Nikko Principal Investments (NPI), a UK and Australian-based private equity business, as part of a structural overhaul announced on Friday.

Brian Berry, NPI's UK chief executive, left on Friday, having failed in a £400m bid for the business. Citigroup decided to abandon an auction process, in which Australian management is also thought to have been bidding, and instead sell NPI's existing investments over the next 18 months to two years. A company insider said: "We think NPI will appoint a small team to run off the business by spinning out the portfolio companies."

A second source said that a Citigroup banker from Tokyo is expected to head an eight- to 10- strong team which will wind down NPI. It is unclear what will happen to NPI's European staff, who are thought to number around 40.

Businesses that the banker will have to sell include Cabot, a debt purchasing business bought in 2006 for £275m, and LifeBond Group, a Munich-based specialist funds manager.

Arguably NPI's most famous company was RoadChef, the motorway services chain it bought in 1998 and sold for £425m last year. Citigroup inherited NPI when it acquired Nikko Cordial Corporation, the Japanese banking group, last year.

Citigroup said on Friday that it would sell or wind down around $400bn (£205bn) of non-core assets by 2010 as it continues to struggle with the problems caused by the credit crunch. The investment bank hopes that this will cut $15bn off its cost base.

A spokesman for NPI declined to comment and Mr Berry did not return calls.

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