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SkyBridge Capital to acquire Citi Alternative Investments, Adding $4.2 Billion

Date: Tuesday, April 20, 2010
Author: Hedgetracker.com

Citigroup Inc. (NYSE: C) announced last week that Citi Alternative Investments’ hedge fund, hedge fund seeding, and hedge fund advisory businesses would be sold to New York-based alternative asset management firm SkyBridge Capital LLC. In total, the Citi Alternatives acquisition will transfer approximately $4.2 billion in assets from CAI to SkyBridge Capital.

Citigroup’s interest in selling the business has been known for some time. In 2009, Citigroup identified $715 billion of noncore assets to be sold, liquidated, or wound down in order to reduce the bank’s risk profile. Financial terms of the transaction are not known, but if the $4.2 billion in assets generate 2% management and 20% performance fees, as is standard in the hedge fund industry, the asset base should generate over $80 million per year, before performance fees.

SkyBridge Capital, which currently focuses solely on hedge fund incubation, will manage a total of $5.6 billion in assets after the acquisition is complete. Raymond Nolte, the director of CAI’s businesses since 2005, will become the Chief Investment Officer and a managing partner of SkyBridge Capital. Twenty others from Mr. Nolte’s CAI team will also join him at SkyBridge.

Anthony Scaramucci founded SkyBridge in 2005 and in 2007 Scott Prince joined the firm as a Managing Director. Prior to SkyBridge, Mr. Prince was a partner at Eric Mindich’s Eton Park Capital Management. SkyBridge Capital is headquartered in New York with an additional office in Zürich.