(Bloomberg) -- Citigroup Inc. is in advanced talks to partner with LuminArx Capital Management on a new asset-based lending strategy, according to people with knowledge of the matter.
The New York-based bank’s markets division is negotiating a structure in which Citigroup may obtain a minority stake in LuminArx over time, said one of the people, who along with the others requested anonymity discussing confidential information. A deal has not been agreed to but if one is reached, it could be announced in coming weeks, the person said.
The initiative is a separate to its pursuit of a direct lending partner to complement the bank’s existing broadly syndicated leveraged finance business, one of the people said.
Read more: Citi in Talks to Start New Private Credit Strategy by Early 2024
The discussions are the latest in a series of bank efforts to gain a foothold in the booming private lending markets, which can include bespoke financing agreements tied to a company’s assets. The Citigroup partnership will help originate and provide back-leverage on asset-backed debt, the person added.
LuminArx is led by co-founders Gideon Berger and Min Htoo, both alumni of Blackstone Inc.
Representatives for Citi and LuminArx declined to comment.
Read more: KKR Says Asset-Based Debt Among Top Private Credit Opportunities
--With assistance from Katherine Burton.
©2023 Bloomberg L.P.