Business Maverick

Business Maverick

Citigroup looks to deepen ties with Mideast’s richest families

Citigroup looks to deepen ties with Mideast’s richest families
A Citibank branch in New York on Friday, 7 January 2022.

Citigroup has been dispatching its top investment bankers to spend more time with family offices across the Middle East as the funds look to deploy their riches in areas like real estate and private equity. 

In most cases, these families generate their wealth from large companies they own, giving Citigroup another reason for trying to capture more of their business, said Manolo Falcó, a vice chairman in the firm’s banking division. 

“It’s obviously a great opportunity for us,” Falcó said in an interview from Abu Dhabi. “They have talented people leading these family offices and they want to do their own investments, want to participate in IPOs. They want exposure to private deals, they want to be in early stage growth companies.”

Thousands of millionaires have poured into the United Arab Emirates in recent years, turning cities like Dubai and Abu Dhabi into hubs for family offices. More than a third of these firms have assets under management of $1-billion or more, according to a 2023 report by the consultancies KPMG and Agreus. 

More broadly, Falcó expects the boom in dealmaking and initial public offerings across the Persian Gulf to continue this year as governments and wealth funds look for ways to diversify their economies beyond oil. 

“I have a clear mandate to spend a lot of time in the region because there’s a lot of business to do here and the region is highly strategic for us,” Falcó said. “There are a lot of public and privately-owned companies that will need to go to market.” 

Read more: Top Citi Banker Sees Deals Pick Up in Sign Slump is Nearing End

The Middle East has been gripped by a dealmaking frenzy even as other regions around the world have suffered a dearth of business in recent quarters. Take the market for initial public offerings: Globally, public listings tumbled to their lowest level in more than a decade in 2023, but the Middle East had one of its best years on record for the business. 

Citigroup has also been focused on deepening its ties with the largest sovereign wealth funds in the region, which are managing roughly $3 trillion of assets on behalf of Middle Eastern governments. Entities including Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund have become key players in global finance after emerging from a commodity boom flush with cash and looking to spend billions of dollars on everything from technology and finance to sport and health sciences. 

Falco, who until recently led Citigroup’s investment banking division, said sovereign wealth funds are beginning to structure themselves the way a Wall Street bank is organised with teams based on sectors and regions in order to capture more deal flow. 

“There’s a lot of interesting opportunities for them in Asia,” he said. “We are definitely bringing them ideas to look into the region and that’s refreshing.” 

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