Citi, LuminArx Launch $2B Private Lending Vehicle

Citibank has partnered with alternative investment manager LuminArx Capital to launch Cinergy, a new tool for the private lending market.

The tool will offer a range of private credit solutions for companies, including Citi’s international client base. LuminArx and its institutional partners plan to commit more than $2 billion to Cinergy, while Citi’s spread products franchise will provide leverage solutions.

Cinergy will make investments in a variety of asset types, such as corporate debt across the capital structure and asset-backed credit (commercial, consumer, and residential).

“The private lending market is experiencing transformative growth, and we are pleased that Cinergy will enhance our ability to meet the capital needs of our clients,” said Mitali Sohoni, head of asset-backed financing at Citi.

Increased regulation has caused traditional banks to reconsider the loans they offer. They have responded by collaborating with private capital sources, who are not subject to the same level of regulation as banks and can afford to make riskier loans.

Last year, it was reported that Citigroup was in talks to launch a new direct lending strategy in early 2024, as part of its ambition to penetrate the rapidly expanding private credit sector.