Citigroup is spinning off its buyout arm and will not invest in the unit's new $2bn (€1.6bn) fund in order to avoid conflicts with clients and the bank's own new private equity fund, according to sources.

The spin-off, which is called Court Square, is comprised of the business previously known as Citicorp Venture Capital. The Court Square team is led by Bill Comfort, who led Citicorp Venture Capital for 25 years.