Two former Citi Alternative Investments chiefs are looking to give institutional investors a piece of the booming alternative investment industry.
Michael Carpenter, the former Citigroup investment banking chief, is reportedly setting up a $1 billion fund that will invest in hedge funds and private equity firms. Joining him in the new endeavor is Dean Barr, who left CAI earlier this year after Citi bought hedge fund Old Lane Partners and installed its founder, Vikram Pandit, as its new alternatives chief.
Southgate Alternative Investments Strategies plans to take minority stakes in at least 10 managers, focusing on firms with at least $3 billion in assets under management. In particular, it is looking at hedge funds investing in Europe and Asia. No one investment will exceed 25% of the firm’s portfolio.
In addition to Carpenter and Barr, the new firm boasts as partners former Credit Suisse investment bank CFO Barbara Yastine, Qtrade Finanical Group co-founder Josephen Meehan and former Mikronite Technologies Group CEO Jeffrey Coats. The principals will invest about $10 million in the firm.
Soutgate will charge a 2% management fee, and share 15% of all profits above 8% per year.