Private Equity Exit Strategies in a Shifting Market: How Citi's Strategic Hires Signal Evolving Dynamics in Liquidity and Investor Returns

In 2025, private equity (PE) firms are navigating a complex landscape where liquidity constraints and shifting market dynamics demand innovative exit strategies. As interest rates stabilize and public market valuations rebound, the pressure to unlock value from aging portfolios has intensified. According to a Deloitte report, exit values for PE-backed companies have declined sharply since 2022, with IPOs accounting for just 2–3% of U.S. exits in 2023, compared to an average of 21% between 2008 and 2021 (Deloitte report). This liquidity crunch has pushed firms to explore alternatives like secondary buyouts and private IPOs. Against this backdrop, Citigroup's strategic hires in equity capital markets (ECM) and leveraged finance signal a pivotal shift in how PE liquidity is structured-and who controls it.

Citi's Talent War: Building a Bridge Between PE and Public Markets

Citigroup's recent appointments, including Bernal Vargas to lead North American ECM and Ryan Williams to co-head leveraged finance, underscore the bank's ambition to dominate PE exit strategies. Vargas, a former JPMorgan Chase executive, brings deep expertise in equity underwriting, a critical skill for facilitating IPOs-a historically lucrative but recently underperforming exit route, as reported by Reuters. Meanwhile, Williams, hired from Bank of Montreal, is tasked with bolstering Citi's leveraged-finance capabilities, which are essential for structuring buyouts and debt financing, according to Bloomberg Law. These hires are part of a broader strategy led by Viswas Raghavan, Citi's new head of banking, to rebuild the firm's investment banking unit and compete with rivals like JPMorgan and Goldman Sachs, FintechScoop reported.

The significance of these moves lies in their alignment with PE's evolving needs. As private equity firms face a $1 trillion liquidity bottleneck in older vintages, With Intelligence notes, Citi's expanded ECM and leveraged-finance teams are positioned to act as intermediaries between private portfolios and public markets. For instance, Vargas's leadership in ECM could streamline IPO preparations for PE-backed companies, particularly in high-growth sectors like AI and fintech, where public market appetite is resurging, as an Enventure Trends piece argues. Similarly, Williams's focus on leveraged finance could facilitate secondary buyouts, which accounted for 38% of deal value in 2024, by providing the debt structures needed to fund these transactions, according to Private Equity Bro.

The Liquidity Equation: How Citi's Hires Impact Investor Returns

Citi's strategic investments in talent are not just about market share-they're about reshaping the economics of PE exits. Subscription line financing, a tool Citi has recently re-entered, exemplifies this. By offering revolving credit facilities to PE firms, Citi helps them meet capital calls and manage liquidity during market downturns, Bloomberg reported (Bloomberg). This is particularly valuable in a climate where limited partners (LPs) demand faster distributions. For example, a 2025 EY study found that 72% of PE professionals cited inadequate financial data as a barrier to exits, highlighting the need for banks to provide not just capital but also strategic guidance (EY study).

Moreover, Citi's leveraged-finance team is directly addressing the challenges of secondary buyouts. These transactions, which allow PE firms to transfer stakes to other private equity groups, have become a lifeline for liquidity-starved portfolios. By hiring experts like Williams, Citi is enhancing its ability to structure complex financing deals, such as GP-led continuation funds, which let general partners retain control of high-performing assets while extending holding periods, as Morgan Stanley explains. This flexibility is critical in a market where 4,000–6,500 delayed exits are now poised to materialize as M&A activity rebounds, PwC noted (PwC).

Market Dynamics and the Road Ahead

While Citi's hires are a response to immediate market pressures, they also reflect long-term trends. The resurgence of IPOs in 2025, driven by AI and ESG-aligned sectors, has created a renewed demand for ECM expertise, according to PDA Advisors. Vargas's appointment positions Citi to capitalize on this trend, potentially boosting investor returns through higher-valuation exits. Meanwhile, the secondary market's growth-fueled by record fundraising and institutional buyers like sovereign wealth funds-means Citi's leveraged-finance team could play a gatekeeper role in determining which assets get refinanced and which are liquidated, With Intelligence observes.

However, challenges remain. Geopolitical uncertainties and regulatory scrutiny over ESG compliance continue to complicate exit timelines, DLA Piper warns (DLA Piper). For Citi, the key will be leveraging its expanded capabilities to offer tailored solutions. For instance, its subscription line financing could help PE firms navigate volatile capital calls, while its ECM expertise could ensure IPOs are timed to maximize returns.

Conclusion

Citigroup's strategic hires in 2025 are more than personnel changes-they are a calculated response to the evolving demands of private equity. By strengthening its ECM and leveraged-finance divisions, Citi is positioning itself as a critical player in the liquidity equation, bridging the gap between private portfolios and public markets. For investors, this means a more dynamic exit landscape, where the right banking partner can make the difference between a delayed exit and a high-impact liquidity event. As the market continues to shift, Citi's ability to execute on this strategy will likely shape the returns of PE-backed assets for years to come.