Citigroup Inc. plans to have investment banking executives work more closely with their Citi counterparts who manage hedge funds and stakes in leveraged buyouts, said Robert Rubin, the chairman of the company's executive committee.
"They have been developing ways of working with each other that have turned out to be quite effective," Mr. Rubin, 68, said in an interview Thursday.
The initiative is among the first to include Vikram Pandit, who joined Citigroup as head of the alternative investments division last month when Citi bought his hedge fund company, Old Lane LP.
Citi wants its securities unit, run by Michael Klein and Thomas Maheras, to find new ways to increase profit by collaborating with the money managers who oversee the fastest-growing assets.
"This is potentially an exceedingly productive relationship," said Mr. Rubin, who added that Mr. Klein, Mr. Maheras, and Mr. Pandit had dinner together Wednesday night at a Citigroup strategy meeting.
Investment banking generates the most profit of the New York company's five biggest units, while alternative investments is the fastest-growing.
The investment banking unit earned $2.6 billion on revenue of $9 billion in the first quarter. Profit from alternative investments was $222 million, and assets rose 52% from a year earlier, to $43 billion.
Mr. Rubin denied a Thursday report by CNBC that Mr. Klein was considering leaving Citigroup because Mr. Pandit, 50, appeared to be a potential successor to chief executive officer Charles O. Prince, who is 57.
"That is absolutely and totally untrue," Mr. Rubin said of the possible departure of Mr. Klein."
