Citigroup (C) says now is the time to rebuild its equities unit. In what could be considered as another sign of recovery from the financial crisis, the third largest U.S. bank by assets will invest in its equities franchise as it adapts to new rules that force banks to maintain higher capital levels. The new rules are designed to make the financial system more stable, and less risky. After spinning off non-core assets since the economic downturn, Citi hopes to profit from a retreat of rivals including Goldman Sachs (GS), Morgan Stanley (MS), and JPMorgan Chase (JPM). Citi plans to court hedge funds more actively as part of its plan to beef up its equities market share. The bank will shift its focus to hedge funds from traditional asset managers, which could bring higher returns through fees. Citi will also revamp its trading technology, hire key executives, and expand research as part of its four-point plan. There is no word yet on how much the bank plans to spend as part of its rebuilding efforts, but it has hired John Lowrey to lead its electronic execution unit and former UBS (UBS) executive Adam Herrmann to head prime brokerage. TheStreet's Kurumi Fukushima reports in New York.
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