Citigroup has agreed to sell a majority of its interest in a private-equity fund to Lexington Partners.

Citi would sell 80% of its $1.5 billion limited partnership interest in Metalmark Capital Partners II under the terms of the agreement, Citi and Lexington said Friday in a press release. Additional terms were not disclosed. Citi and Lexington, a New York investment management fund, expect the deal to close in the fourth quarter.

Metalmark had previously been an affiliate of Citi, before the bank sold the unit in December to comply with the Volcker Rule. Metalmark had been housed in Citigroup's Capital Advisors division, which has largely been dismantled.

The $1.9 trillion-asset Citi has recently sold business units in Spain, Greece and Brazil as it divests units and asset portfolios that it has deemed non-core.

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