April 24 (Reuters) - Citigroup ( C ) has hired

investment banking veteran Klaus Hessberger to co-lead its newly

formed Financial and Strategic Investors (FSI) arm, according to

an internal memo seen by Reuters on Friday.

The banking giant is replacing its Global Asset Managers

(GAM) group with the FSI arm, which will focus on financial

sponsors, sovereign wealth funds, and family offices, said the

memo from Citi's Head of Banking and Executive Vice Chair, Vis

Raghavan.

Hessberger, who is currently the global co-head of

Lazard's ( LAZ ) Financial Sponsors Group will co-lead FSI out

of London with current North America GAM leaders, Michael Marcus

and Michael Quadrino, the memo showed.

Current GAM leader Ashu Khullar will step down and explore

other senior roles within the company, the note added.

Incoming investment banker Hessberger has over three decades

of experience in the industry, including 25 years at JP Morgan

in several senior leadership roles.

Additionally, the memo said Citi will establish Global

Infrastructure Coverage as an independent vertical led by

insider Todd Guenther in the midst of exceptional levels of

activity within the infrastructure space.

(Reporting by Prerna Bedi in Bengaluru and Anousha Sakoui in

London)