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SkyBridge to acquire Citi Alternative Investments, Adding $4.2 Billion

|Includes: Citigroup Inc. (C)

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. 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, 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. Twenty others the CAI team will also join him at the firm.

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

Disclosure: No Positions