Two former Citigroup bankers have launched an alternative investment firm, as the bank struggles to gauge the extent of its writedowns, the Financial Times reports
Michael Carpenter started Southgate Alternative Investment Strategies to invest in banking groups and fund managers. Southgate may also move into hedge funds targeting Asian markets and European investment. It will acquire minority interests in at least 10 managers overseeing $3 billion or more, according to a marketing document obtained by Bloomberg.
Carpenter hired Dean Barr, the former head of Citigroup’s hedge fund platform, as well as Barbara Yastine, the former finance chief of Credit Suisse Group’s investment bank. It was not immediately clear what Barr and Yastine would oversee at Southgate.
Carpenter worked at Citigroup for 11 years, and served as head of the alternatives unit from 2002 until he left the bank in May 2006. He developed the division into a business that, at the time of his departure, was managing nearly $40 billion in private equity, hedge funds, real estate, futures and credit structures.
Following Carpenter’s departure from Citigroup, Barr took over the hedge fund platform until the bank spent $800m to acquire former Morgan Stanley banker Vikram Pandit’s hedge fund Old Lane in April.
Marjorie Magner, the head of consumer banking, and former president Robert Willumstad left Citigroup in July 2005 and launched Brysam Global Partners, a US private equity firm earlier this year. Brysam targets investments in financial services with a focus on consumer opportunities in emerging markets including Mexico, Russia, India and China.
Charles Prince resigned following massive writedowns at the bank stemming from turmoil in the credit markets. Prince was replaced by chairman Sir Win Bischoff who will serve as interim chief executive, and senior adviser Robert Rubin who work as chairman. In a conference call yesterday, the firm admitted that losses from sub-prime exposure could surpass $11bn.