Citigroup Expands Private Credit Reach with New Hire
Citigroup Inc. is taking a significant step in expanding its presence in the multitrillion-dollar private credit market with the hiring of Aashish Dhakad from Ares Management Corp. Dhakad will assume the role of head of private credit origination for North America, focusing on sourcing deals from corporate and commercial banking clients for private credit investors.
This move signifies Citigroup’s intention to broaden its reach in private credit beyond its existing partnership with Apollo Global Management. While the collaboration with Apollo primarily focuses on acquisition financing, the bank is now looking to explore new opportunities in the private credit space.
Expanding Scope of Deals
Deals under the expanded scope could involve lending to small or mid-sized corporate clients of Citigroup who may not have easy access to syndicated markets or traditional bank loans. Achintya Mangla, Citigroup’s head of financing, highlighted that these new opportunities could benefit not only Apollo but also other private credit managers.
According to Mangla, “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. Banks have limitations.”
Diversifying Offerings
The expansion into private credit reflects Citigroup’s strategy to offer a wider range of private-credit options to its clients, in addition to its traditional underwriting business in public debt markets. By focusing on delivering tailored private solutions on the debt side, Citigroup aims to enhance its fee revenue and provide clients with a more comprehensive suite of lending models.
Dhakad’s appointment at Citigroup is a notable move, as it represents a rare instance of a bank hiring from the private credit sector. In recent years, talent has predominantly flowed in the opposite direction, with private capital firms hiring former bankers to strengthen their market position.
Industry Trends
Private credit managers have been actively expanding their reach beyond traditional buyout financing, targeting growth areas such as investment-grade corporate loans, asset-backed finance, and sports investing. This trend underscores the evolving landscape of the private credit market and the increasing competition among financial institutions to offer innovative financing solutions.
Overall, Citigroup’s strategic focus on private credit expansion aligns with industry trends and the growing demand for alternative lending options. By leveraging its existing client relationships and expertise, Citigroup aims to further solidify its position in the private credit market and deliver value to both clients and investors.
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