Citizens lands hires for fund finance push

Citizens has been building a private equity finance team to cater to GPs affected by a US regional banking crisis that shook the subscription lines market.

Eric Schuppenhauer, head of consumer lending, confirmed the bank’s expansion plans in a statement to Private Funds CFO.

“The bank failures earlier this year have created a gap in emerging and middle market private equity. Our new private equity finance teams in New York and San Francisco will focus on expanding Citizens’ platform to support these firms in an entrepreneurial environment, with customized lending as well as treasury and cash management,” Schuppenhauer said.

The new hires for the team are included in a hiring of 50 senior private bankers and related personnel, a spokesperson for Citizens said. The group of 50 is part of a broader increase in private banking that is around 140 and is in four locations across the US, Schuppenhauer said separately.

The spokesperson did not immediately have data on how many in the 50-person group are with the private equity finance team.

Private Funds CFO confirmed that Scott Aleali, who most recently worked at First Republic, was hired as head of private equity finance at Citizens. He announced his new role in a LinkedIn post last week.

Several people also had LinkedIn announcements about moving from First Republic to Citizens’ private equity finance team last week.

The Citizens spokesperson declined to confirm the names of people hired from First Republic, stating it generally doesn’t give names beyond national press releases. But the representative added that Citizens has hired people from First Republic and other financial institutions.

Citizens is the latest lender to make a new play in the fund finance space since the crisis.

Private Funds CFO reported earlier this month that The Huntington National Bank added 10 former Signature Bank staff to build a sub line lending program. And Axos Bank hired Trevor Freeman, a former managing director at Signature, to build a fund finance team.

Silicon Valley Bank continues to operate under that brand name, as a division of First Citizens, which acquired it earlier this year.

The US regional banking sector was upended by the March collapses of SVB and Signature, and JPMorgan Chase’s rescue acquisition of First Republic in May. The crisis worsened a supply gap in sub lines that had already constrained supply.

JPMorgan now holds First Republic’s fund finance business, though it’s unclear what its fate will be. JPMorgan already has its own fund finance business, mostly catering to large PE firms.

Signature’s fund finance book was retained by an FDIC-supported bridge bank, which offloaded other parts of the bank to New York Community Bancorp. The FDIC has yet to announce a sale date for Signature’s fund finance book.