Citigroup settles legal dispute over grim fundraise

Italian investor F2i was said to be seeking €100m in damages over the failed placement of an infrastructure fund in 2007, alleging Citi had a conflict of interest in its work.

Italian infrastructure fund F2i and US bank Citigroup announced yesterday that they have reached an “amicable” settlement over legal proceedings started by F2i regarding the failed placement of an infrastructure fund in 2007.
Spokespeople from Citigroup and F2i did not wish to comment on whether any damages were paid as part of the settlement. In a joint statement, both parties said the lawsuit is now water under the bridge, declaring “their mutual willingness to discuss and evaluate further collaborations in M&A [mergers and acquisitions], capital markets and banking transactions”.
F2i hired Citigroup in 2007 to raise money for its infrastructure fund. But at the end of its 18-month contract with F2i, Citigroup told the Italian investor that it had been unable to find any investors for its 15-year infrastructure vehicle.
This prompted F2i, in May 2010, to file a lawsuit with a Milan court against Citigroup, alleging there had been a conflict of interest since Citigroup started raising its own infrastructure fund – the $3.4 billion Citi Infrastructure Investors – after it had been hired to place F2i’s vehicle. At the time, reports in Italian newspaper Il Sole 24 Ore suggested F2i was seeking up to €100 million in damages, although the firm never confirmed this figure.
F2i ended up closing its infrastructure fund on €1.85 billion in early 2009 with commitments from Merrill Lynch, BIIS (part of Intesa Sanpaolo), state-backed bank Cassa Depositi e Prestiti, Unicredit, seven Italian banking foundations and two pension funds.