The Outsider trying to restore Citi to investment-banking glory

Vis Raghavan wants his dealmakers to advise on and finance more private-equity deals

- Justin Baer

The man charged with reviving Citigroup's reputation as an investment bank is setting his sights on the buyout kings.

Vis Raghavan, Citi's new banking head, wants his dealmakers to advise on and finance more private-equity deals, bringing in more fees to a group that has punched below its weight for more than a decade.

If they succeed, the business should be taking a bigger slice of the pie that companies and investors pay to Wall Street each year. Hitting his even modest growth targets could bring in some $400 million in additional fees a year. Citi earned $2.7 billion in investment-banking fees last year.

Citi Chief Executive Jane Fraser hired Raghavan, who ran JPMorgan's dealmakers, earlier this year. The bank is betting the decision to bring in a leading competitor will send a clear signal to clients-and its own bankers-that Citi is back in the game.

In a recent meeting with one firm, Citi bankers said, "We're embarrassed by how little we've done, for a long period of time."

The challenge is steep. Citi was once a leader in private equity but because of regulation and wider problems at the bank, it grew reluctant to make the loans those clients expect. It lost the confidence of buyout firms and stumbled in the league tables, where competition remains stiff.

UBS and Jefferies are both trying a similar approach to strengthen their dealmakers by counting on private-equity firms, pitting them directly in competition with Citi. And Wall Street's established players, from JPMorgan and Bank of America to Goldman Sachs Vis Raghavan wants his dealmakers to advise on and finance more private-equity deals, aren't backing down, either.