SkyBridge Capital is acquiring the hedge fund management group of Citi Alternative Investments from Citi Holdings for an undisclosed amount.
Speculation that SkyBridge, which runs a hedge fund incubation platform with $1.4 billion under management, would acquire CAI’s hedge fund unit has been running high since February. The deal finally was announced Wednesday.
Citi Holdings will retain a revenue stream for a number of years, according to Anthony Scaramucci, managing partner of SkyBridge Capital.
The deal is expected to close June 30, Mr. Scaramucci said.
CAI manages a total of $4.2 billion in hedge funds of funds, hedge fund seeding strategies and pension hedge fund advisory business. About $2.5 billion of that comes from institutional investors.
According to a joint news release, the sale of CAI’s hedge fund unit is “consistent with Citi’s strategy to reduce non-core assets, tightly manage risks and optimize the value of assets in Citi Holdings, while working to generate long-term profitability and growth from Citicorp, which comprises the company’s core businesses.”
Raymond Nolte, CEO of CAI’s hedge fund management group will become a SkyBridge managing partner and chief investment officer. The CIO role is a new position for SkyBridge Capital, Mr. Scaramucci confirmed. Mr. Nolte’s entire team of CAI employees also will join SkyBridge.
“The integration of a (hedge funds-of-funds) business is a natural fit with the SkyBridge platform,” Mr. Scaramucci said.