Citi's head honcho in India moves to KKR

Sanjay Nayar joins KKR to build an India business for the financial sponsor after 23 years with Citi. He will be succeeded by one of the bank's top names in Russia.
Citi South Asia head Sanjay Nayar will join private equity firm Kohlberg Kravis Roberts & Co (KKR) in one of the most senior-level departures the US bank has seen in the region. Nayar is due to start at KKR in January after an agreed transition period and will continue to be based in Mumbai, where KKR will set up office and build a team.

Nayar is a Citi veteran who joined the US bank in India in 1985 after his MBA. He has been CEO for Citi in India and area head for the bank in India, Sri Lanka, Bangladesh and Nepal since 2002. He is also a member of CitiÆs Asian executive operating committee. In 2006 Nayar was appointed to CitiÆs global management committee.

Citi has appointed Mark Robinson to succeed Nayar as CEO of Citi South Asia. Robinson will also join the Asian executive operating committee. He is a 24-year Citi veteran who has spent the majority of his career in emerging markets and is currently president of Citibank ZAO (a subsidiary of Citigroup in Russia), as well as Citi country officer for Russia and division head for Russia, Ukraine and Kazakhstan.

CitiÆs presence in India spans consumer banking, corporate and investment banking, venture capital and private banking. It is the leading international bank in India with approximately 10,000 employees and more than $3.1 billion of capital invested.

Rumours that KKR was courting Nayar have been doing the rounds for a year. The US private equity firm is one of Citi's clients both in Asia and globally.

In mid-August Citi announced a reorganisation of its Asia business under the direction of regional CEO Ajay Banga, who was appointed earlier this year. Banga created four operating regions. NayarÆs portfolio did not change, though it was speculated that he could have moved to a regional role had he chosen to do so. But Nayar seemed content to continue to run the highly successful India franchise. Indeed, some observers commented at the time that the product and coverage model Citi had already successfully adopted in India would be the model for the rest of the continent û a pat on the back for Nayar's leadership.

ôThis is a purely personal decision, driven by his desire to do something new and entrepreneurial,ö explains a source close to Nayar. "He's leaving behind a sound business with strong revenue momentum."

During his 23-year tenure with Citi, Nayar worked with the fixed-income group at Salomon Smith Barney in New York for five years between 1996 and 2002, covering fixed income, currencies and derivatives. Before that he was in London for three years, heading emerging market equities for Citibank London. Between 1985 and 1994, Nayar held various positions across the corporate bank and the transaction bank in India, including head of the corporate finance and capital markets business.

"Nayar is extremely well regarded by Citi senior management and obviously efforts were made to convince him to stay," says a source. "But he felt it was time to move on and try his hand somewhere else at something else."

Private equity in India has attracted a number of high-fliers. The head of Carlyle's India buyout team, Rajeev Gupta, joined the private equity firm from DSP Merrill Lynch where he was head of investment banking and a board member. Akhil Gupta, chairman of Blackstone India, was earlier CEO-corporate development for Reliance Industries and Reliance Infocomm.

But in enticing Nayar to join the firm, KKR has done exceedingly well for itself. As head of the largest foreign bank operating in India, Nayar is on first name terms with regulators, bureaucrats, politicians as well as a cross-section of Indian industry leaders. Citi India has relationships with over 1,500 large corporates and multinationals and over 2,500 small- and medium-size enterprises. These relationships will stand KKR in good stead as it seeks to grow its India business.

In a written statement related to the hire, KKR affirmed its optimism with respect to India and said it intended to build a portfolio across private equity, real estate, infrastructure and fixed income. This may have been one of the things that attracted Nayar to KKR, say sources, as a remit to do only private equity investing might not have convinced him to leave his broad scope of work at Citi. KKR currently has offices in the region in Hong Kong, Beijing, Tokyo and Sydney.

Some sources expressed surprise that Citi has chosen someone with little current experience of Asia to take over from Nayar. India is a jewel in the Citi crown, where the US bank is the most well-entrenched international bank. It has remained nimble and moved into new products and areas as opportunities have presented themselves. It is not clear whether someone with no prior knowledge of working in India will be able to hit the ground running.

But others suggest that the appointment is very much in line with CitiÆs strategy to move talent across offices and note that Robinson has been with Citi for 24 years.

ôRobinson is a great choice,ö says a source close to the development. ôHe brings to the job considerable energy and a measured appetite for risk, which is critical to lead the business in an emerging market like India.ö

Robinson takes over the India business at a time when it is facing new challenges. It is now clear that the credit crisis is having an impact on Asian economies. Indian companies have traditionally been large users of leverage and as that leverage dries up or becomes more expensive, companies will have to become more lean, or perish. The Indian stockmarket has fallen to levels last seen more than four years ago. A cascading effect on earnings is inescapable, making credit and lending decisions more critical. In the consumer finance business, delinquencies are widely expected to increase.

Before taking up his current positions in Russia, Robinson was the division head for Turkey and Israel, overseeing institutional clients and consumer banking. From 1997 to 2002, he was based in Hungary. Robinson joined Citi in 1984 and his first assignment was Pakistan. He has also worked in the US and Hong Kong.

Citigroup shares fell 26% to close at $4.71 on the New York Stock Exchange Thursday.
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