Citigroup has announced the creation of a strategic financing vehicle in the rapidly growing private lending market in partnership with alternative investment manager LuminArx Capital.

Citi said that the new company, Cinergy, will offer “a broad range of private credit solutions to companies”, and invest across multiple asset classes, including asset-backed credit (commercial, consumer and residential) and corporate debt across the capital structure.

To support Cinergy, LuminArx and its global institutional partners intend to commit more than $2 billion of capital, Citi said, adding that its own Spread Products franchise will provide innovative leverage solutions to Cinergy to expand its investment capacity.

Cinergy will enable LuminArx to access a range of private credit opportunities sourced by Citi through its global client network – including from its commercial banking division – and utilise Citi’s distinct financing capabilities.

Mitali Sohoni, head of Asset-Backed Financing at Citi, said: “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. Powered by LuminArx’s execution capabilities and the significant industry experience of its team, I believe Cinergy represents a truly differentiated offering.”

Traditional banks are increasingly reevaluating the loans they provide due to heightened regulation, with many partnering with private capital providers that are not subject to the same level of oversight.

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