The manager of an embattled family of Citigroup fixed-income hedge funds is leaving the firm.

Reaz Islam’s departure comes amid news that at least three banks lost more than a billion dollars in his Falcon Strategies funds. The Falcon funds have lost more than 75% of their value during the credit crisis, leading Citi to orchestrate a $500 million partial bailout of the fund’s retail investors, as well as consolidating its assets and liabilities on the bank’s balance sheet.

Islam has been with Citi for 18 years, 12 as head of its fixed-income alternatives team. He will remain with the bank for a “transition period,” according to an internal memo.

“For most of the last 12 years, he was responsible for building a client franchise through the development and management of numerous and innovative investment strategies as the leader of the Citi Fixed Income Alternatives team” the memo reads. “We thank Reaz for his leadership, contributions and professionalism, especially during the very difficult markets of the last nine months.”

The memo did not specify the reasons for Islam’s departure.