Citi to sell funds unit to Skybridge Capital

Citi to sell funds unit to Skybridge Capital

New York: Citigroup Inc plans to sell a hedge fund business with $4.2 billion worth of assets to SkyBridge Capital LLC, a New York firm that invests in start-up fund managers.

The deal announced on Wednesday marks another step in Citi’s plan to shed assets. The unit had been languishing in Citi Holdings, the bank’s repository for businesses that it is trying to sell or wind down.

Terms of the deal were not disclosed. The unit includes Citi’s hedge fund business, hedge funds that it manages, and stakes in small hedge funds.

The planned deal was first reported in February, when a person familiar with the talks said that SkyBridge had emerged from preliminary discussions as the final, exclusive bidder for the unit.

Citigroup sold the businesses from its Citi Alternative Investments unit, which has been managing funds-of-hedge-funds since 1994.

Raymond Nolte, who oversaw the businesses at Citi, will join SkyBridge as part of the deal. Nolte, who will become a managing partner and chief investment officer, will also bring a team of more than 20 people from Citi to SkyBridge.

The New York firm, led by managing partners Scott Prince and Anthony Scaramucci, provides capital to hedge fund managers in exchange for a share of its fees.