Andy Sieg, who heads Citi’s wealth management unit, said the bank still recommends private credit to clients. Withdrawal requests at non-traded private credit funds are running well above their typical 5% quarterly caps.
Those funds, known as business development companies (BDCs), hold multiyear loans but allow periodic withdrawals. Some clients therefore cannot cash out in full.
Does Citi’s Private Credit Confidence Match Market Pricing?
Sieg made the case on CNBC’s Halftime Report, calling private credit and private equity long-term building blocks rather than trades.
He said clients invest for 10 to 30 years, so the test is whether a diligence team vets each manager.
“clients have been happy with the returns that they’ve had”
Andy Sieg, head of Citi Wealth, on CNBC
Meanwhile, many listed BDCs trade 10% to 20% below the reported value of their holdings, Valuation Research data showed.
The same preliminary data show requests at 11 of the 14 largest non-traded BDCs averaged 13.0% in the third quarter. That was down from 13.9% in the second. However, it remains well above the typical 5% limit.
In an October blog, the International Monetary Fund (IMF) flagged private credit as a possible amplifier of market stress. It said borrowers could draw on committed direct-lending credit lines if conditions tighten, straining fund liquidity.
How Much of Citi’s Wealth Growth Is Organic?
Wealth revenue has grown for 10 straight quarters. The third-quarter gain was 15% from a year earlier.
A record $38 billion in fresh client money, which Citi calls net new investment assets, flowed in during the quarter. Existing clients supplied most of it by shifting more holdings to the bank, according to Sieg’s memo.
Net interest income rose 20% while noninterest revenue grew 5%, Family Wealth Report data showed. Deposit income therefore drove more of the gain than investment fees.
Still, Sieg said organic flow growth, which excludes market gains, topped 10%, despite acknowledging market tailwinds.
How clients respond to capped withdrawals could show whether private markets stay core holdings across wealth platforms.
