A sign that the big banks are focusing on core fundamentals and not esoteric investments happened today. Citigroup is selling their Citi Property Investors division to Apollo Management. The reasons for the sale are 2 fold. One, these investments are tanking. They are not performing and are a drag to the company. Better to divest them while the company is underwater and still has government investments in it.

The other reason is that big pappy, the federal government and 27% owner of the company, told them to get rid of assets. And when big pappy speaks, you listen. Of course, this subverts our whole economic system when the political arm directly injects itself into the business of business. But, who cares anymore, right?

All I do know is the timing was right for Apollo to buy. Even if the market still goes down, all the factors in the deal point to a bad deal being made by Citigroup. They were told to sell an asset, they did, and they have cover if the deal is bad.

Such is life in the new America…

The inclusion of Citi Property Investors to Apollo’s portfolio will more than triple the private equity firm’s real estate assets, the agency said. City Property Investors’ portfolio includes 65 investments in 26 countries with a net asset value of $3.5 billion, according to the agency. Apollo signed a letter of intent and the deal may take as long as three months to close, the agency said.

The U.S. government stepped in to prop up Citigroup at the height of the financial crisis in October 2008 when officials at the U.S. Treasury feared the bank’s crumbling financial condition could destabilize financial markets worldwide.

On March 4, Citigroup Chief Executive Vikram Pandit told a congressional panel that he had sold off many proprietary trading businesses, including the Phibro energy trading unit, and was focused on trading services for clients. via Reuters

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Related posts:

1. Realogy Gets 150 Million Dollar Commitment From Apollo To Stay In Business A month ago I asked the question, “Is It True...
2. FDIC Will Focus PPIP on Real Estate Sometimes I think the technology industry is in a competition...
3. Black Swan Proofing For Real Estate Nassim Nicholas Taleb has written a brilliant article for the...