Citigroup announces the establishment of Ivaldi Capital, a novel platform to accommodate the increasing demand for alpha-generating investments by pension funds, endowments and sovereign wealth funds.
Ivaldi offers end-to-end service for institutional investors seeking access to active alpha or absolute return strategies via external managers. Among the services it provides are state-of-the-art risk management, portfolio construction and manager selection assistance. The platform also provides a full suite of middle-office services, administration and custody solutions.
Citi is acting as a prime broker, administrator and custodian to Ivaldi.
“This is the only platform providing a comprehensive solution for institutional investors interested in accessing alpha-generating investments, but lacking the necessary infrastructure to support them,” says Nick Roe, Global Head of Prime Finance at Citi. “This initiative is strategically important to Citi, and a clear sign of our ability to innovate and help clients adapt to the changing investment management landscape.”
Through Ivaldi, institutional investors are able to establish cost efficient, managed accounts focused on transparent, liquid investments supported by real time position and risk measurement. The platform also provides an independent screening service to ensure external managers match clients’ designated investment profiles.
“This is a clear example of how our clients benefit when we deliver solutions that leverage the entire Citi platform.” says Andrew Gelb, Citi’s head of Securities and Fund Services in EMEA. “As asset managers strive to meet the needs of investors amid a changing regulatory landscape, Citi is uniquely positioned to guide value across the entire investment lifecycle.”
Ivaldi, founded by former Citi employees, has undergone a full ranging external due diligence and tender process and has launched with €400 million of assets and is likely to expand quickly to €2 billion from its seed investors. Citi owns a minority stake in Ivaldi, but is not providing any investment capital.
The premise behind Ivaldi is the investment vehicle Citi created in 2008 for ATP, the Danish state pension fund. Dubbed AlphaOne at the time, it allowed ATP to access alpha-generating investments in a cost-effective manner, without having to create the infrastructure to support such investments.
“The publicity around our unique skill set in this area generated a number of pension fund and other institutional inquiries seeking similar opportunities,” says Mark Harrison, Head of EMEA Prime Finance at Citi. “We set out to institutionalize, broaden and develop the model, and the result is the establishment of Ivaldi. It facilitates access of a new asset class while providing full operational oversight post the investment decision, ensuring transparency, control and accountability.”
Ivaldi is based in London, but intends to establish presences in Asia and the US.
D.C.