Citi widens private credit net beyond Apollo deal with new role

Citigroup Inc. is casting a wider net in the multitrillion-dollar private credit market with a new hire who will source debt deals beyond the scope of its existing tie-up with Apollo Global Management.

The bank is hiring Aashish Dhakad from Ares Management Corp. to become head of private credit origination for North America, a new role focused on sourcing deals from corporate and commercial banking clients for private credit investors, it said Monday in a memo seen by Bloomberg News.

The Wall Street lender is looking to broaden its reach in private credit beyond acquisition financing, which is the main focus of its partnership with Apollo. Last year, the two firms pledged to work together on $25 billion of deals, with the bank taking a fee when it refers lending opportunities to Apollo.

Deals in the expanded scope could include lending to small or mid-sized corporate clients of Citigroup, including companies that can't easily access syndicated markets or bank loans, according to Achintya Mangla, Citigroup's head of financing. Some of those new opportunities could flow to Apollo as well as to other private credit managers.

"We already have the corporate client relationships with the commercial and corporate bank — not all of them ready necessarily for a syndicated market, not all of them may be rated, not all of them are ready for the bank market," Mangla said in an interview. "Banks have limitations."

The expanded focus indicates the bank's aim to deliver a larger suite of private-credit options for its clients — in addition to its traditional underwriting business in public debt markets — and to chase fee revenue across a larger variety of lending models. Such deal referrals already happen, but it's unusual for a bank to have a banker dedicated to them."

We already have colleagues who originate public securities from those clients," Mangla said. "It's time now to have a more structured and focused effort to work with the same clients, but offer them private solutions on the debt side."

Dhakad's arrival at Citigroup is also a rare example of a bank hiring from the private credit sector. In recent years, talent has largely flown in the opposite direction as private capital firms bolstered their ranks by hiring former bankers in an effort to gain market share.Private credit managers have made a big push in recent years to expand their reach beyond traditional buyout financing. Some of the growth areas they've targeted include investment-grade corporate loans, asset-backed finance and sports investing.