The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/ File Photo

By Ateev Bhandari

(Reuters) -Citigroup said on Thursday it will transfer about $80 billion in client assets from its wealth management unit to BlackRock, further outsourcing investment management as it simplifies core operations.

The move highlights a growing trend among big banks to partner with specialist asset managers while refocusing wealth businesses on client advice and financial planning.

Clients currently overseen by Citi Investment Management (CIM) will continue to work with their Citi private bankers for wealth advice, asset allocation and strategy selection.

BlackRock will manage and implement those strategies, and Citi will roll out BlackRock’s Aladdin Wealth platform to its private bankers and investment professionals.

Citi is "pleased with its existing BlackRock relationship and desires to pass along the remainder of its in-house assets under management," said Christopher Marinac, director of research at Janney Montgomery Scott.

The world’s largest asset manager already oversees part of Citigroup’s $635 billion in client investments, Bloomberg News reported earlier on Thursday.

"It is also a way for Citi to get further efficiency gains very quickly since this outsourcing can drop expenses," Marinac added.

The partnership aligns with CEO Jane Fraser’s restructuring push to streamline operations and sharpen profitability in wealth management, following years of overhauls and job cuts.

Under the agreement - which is expected to begin in the fourth quarter of 2025 - some CIM employees will join BlackRock as portfolio managers for Citi clients.

For BlackRock, the deal brings a sizable inflow and, over time, access to Citi’s private‑markets investment strategies.

It is targeting $400 billion of cumulative private‑markets fundraising by 2030 as it contends with margin pressure from lower‑fee index strategies.

As part of this push, BlackRock unveiled plans in June to include private assets in its retirement plans, which account for more than half of the money the company manages.

(Reporting by Ateev Bhandari in Bengaluru; Editing by Tasim Zahid)