Image Source: Bloomberg.com
Citigroup has handed over the management of about $80 billion in client assets to BlackRock, one of the largest investment firms in the world. This move marks a big change in how Citi handles its wealth management services. Instead of managing these assets internally, Citi is choosing to focus more on providing financial advice and client support, while letting BlackRock take care of the investment side.
Key Points About The Deal
BlackRock will manage $80 billion of assets that currently belong to Citi’s wealth management clients.
The new offering, called Citi Portfolio Solutions powered by BlackRock, is designed to combine Citi’s personalized client advice with BlackRock’s investment expertise.
The switch is expected to begin in the last quarter of 2025, pending regulatory approvals.
Citi clients will still get advice and support directly from Citi’s private bankers even though BlackRock will oversee the investments.
BlackRock will manage investments across stocks, bonds, mixed assets, and eventually private market investments.
Some of Citi’s portfolio managers may move to BlackRock to keep working closely with these clients.
BlackRock’s Aladdin Wealth technology platform will be used to improve how Citi serves its wealth clients.
Why Citi Is Making This Change
Citi wants to focus more on what it does best: providing financial advice and building strong relationships with clients. Managing investments in-house requires a lot of resources and technology. By partnering with BlackRock, which specializes in investment management, Citi can offer its clients access to global investment strategies without handling every detail itself. This approach is expected to reduce costs and improve how the bank serves its wealthiest customers.
This kind of shift is becoming more common in the banking industry. Many banks are choosing to work with specialist asset managers so they can concentrate on planning and advice instead of running the entire investment operation.
What It Means For Clients And The Market
Clients benefit from Citi’s personal advisory service alongside BlackRock’s well-established investment strategies.
The partnership brings advanced technology to Citi’s advisors, helping them make smarter investment decisions and communicate better with clients.
Citi’s wealth management reaches almost 100 countries, so the partnership will have a wide global impact.
The wealth management division of Citi already handles over $1 trillion, including $635 billion in actively managed assets.
Some staff moving to BlackRock means clients will not lose their trusted portfolio managers.
This fits with Citi’s broader strategy of improving profitability and focusing on core strengths.
BlackRock’s Angle In The Partnership
For BlackRock, managing this large asset pool strengthens its position in the wealth management field. It also opens opportunities for BlackRock in private market investments, which are a key area of growth. BlackRock aims to raise $400 billion in private market funds by 2030, and this deal helps toward that goal. Their investment technology and global reach make them a fitting partner for Citi’s ambitions.
Looking Ahead
The full rollout of the new portfolio solution will happen in late 2025 after regulators give the green light.
Investors and analysts will watch how smoothly the transition happens and how clients react.
This could encourage more banks and asset managers to form similar partnerships in the future.
Citi is also focused on growing its wealth business in Asia, aiming to manage $450 billion in assets there.
In short, this deal between Citi and BlackRock signals a new approach to wealth management. Banks are starting to rely on experts in investment management, while concentrating on delivering personal advice and planning. It’s a partnership designed to offer clients the best of both worlds — trusted advice and top-notch investment solutions.
Sources: Bloomberg, Reuters, Morningstar, Investing.com, Asian Private Banker
Advertisement
Advertisement
