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Managed Money

Citigroup Alternative Investments

Types of Strategies



Hedge Funds

Real Estate

Private Equity & Exchange Funds

Managed Futures

Structured Alternative Investments

Hedge Funds

Hedge funds may offer diversification (however, diversification does not ensure against loss) benefits to traditional stock and bond portfolios because hedge fund strategies, in general, tend to not be highly correlated to equity and fixed income markets. Hedge funds possess the potential to benefit from market inefficiencies and emerging trends, regardless of the direction of securities prices. As a result, demand for them has grown significantly in recent years. However, hedge funds involve a number of special risks, including the potential for losses due to leveraging, short-selling or other speculative investment techniques, a lack of liquidity and volatility of returns. At Citigroup Alternative Investments, we offer a full range of hedge funds and funds of hedge funds to qualified individual and institutional investors.

Funds of Hedge Funds

Citigroup Alternative Investments offers a family of actively managed fund of hedge funds portfolios. From global long/short to event-driven strategies, our portfolios span the risk/return spectrum, offering tailored strategies to help fit individual investment objectives. Although these products retain substantial risks, our multi-manager portfolios seek to reduce risk by allowing investors to diversify across investment strategies, asset classes, sectors and geographic markets. They enable clients to gain access to a broad portfolio of hedge funds that would require a significantly higher minimum investment if invested in directly, and permit them to draw on their investments without the longer lock-up periods of other funds.

We use a proprietary, systematic investment discipline for allocating capital among hedge fund strategies, and we provide investment oversight by means of rigorous, ongoing due diligence and risk management, although target returns are not guaranteed. We choose managers based not only on their historical ability to generate consistent outperformance over their peers (though past performance is no guarantee of future results), but also on such variables as fidelity to their chosen investment style, expertise in the use of leverage and a sound understanding of traditional risk management.

Single-Manager Funds

We offer a variety of single-manager funds that are operated by dedicated investment managers. Our single-manager funds employ a diversity of investment strategies including value-driven investments for both long and short trading strategies. Single-manager hedge funds can offer the greatest potential for growth, but may also carry a higher degree of risk than diversified funds of hedge funds.


Real Estate

The Citigroup Property Investors (CPI) unit of Citigroup Alternative Investments offers access to proprietary deal flow in office, industrial, retail, residential and land properties worldwide. Clients can invest in commingled funds, which are generally built around a common focus on a geographical region, investment strategy or investment objective. CPI also structures direct investments for clients seeking opportunities in specific properties and property types as a co-investor with Citigroup.

Our seasoned group of real estate experts is skilled in acquisitions, finance and asset management, although past performance is no guarantee of future results. We bring years of experience to the selection and monitoring of real estate operators, and evaluate economic and market conditions across a range of property sectors and geographic regions. We perform extensive financial analyses on all prospective investments on behalf of our clients' interests as well as our own, since Citigroup co-invests in all of the real estate products we offer and remains an active partner throughout the life of an investment.

Notwithstanding our due diligence efforts, real estate as an asset class is subject to inherent risks. Historically, real estate has experienced significant fluctuations and cycles in value and local market conditions, which may result in the decline in value of a property or the loss of all or a portion of an investment. Sudden increases in supply or decreases in demand, which are closely tied to the performance of the economy, will have an impact on cash flow and total return. Real estate investments are often illiquid and should be regarded as fixed and long-term.


Private Equity & Exchange Funds

Private Equity

Citigroup's history in evaluating the private equity investment community and selecting over 250 separate private equity funds in which to invest our capital has built a deep foundation of experience. We offer single-manager funds that invest in a specific sector, and multi-manager funds that focus on the mix of styles, strategies and sectors that our oversight board deems appropriate at a given time. Our offerings attempt to provide diversification across many dimensions, including investment strategy, state of enterprise development, industry sector and geographic region. We can also provide certain features such as liquidity that investors may require.

Qualified clients will find a spectrum of investments ranging from early-stage venture capital to leveraged buyouts or mezzanine financings, as well as the ability to invest directly in a business opportunity side-by-side with Citigroup's own capital. Potential investors should remember that investments in private equity are illiquid by nature and typically represent a long-term binding commitment. Strategies often include highly speculative techniques, such as leverage, that may result in losses. The investments made by private equity funds are not readily marketable and the valuation procedures for these positions are often subjective in nature. Clients willing to bear these risks can access private equity opportunities through Citigroup Alternative Investments at lower investment minimums than would typically be required for direct investment.


Exchange Funds

Exchange funds allow investors a tax-free means to diversify a low-cost-basis and/or restricted stock position. Exchange funds allow investors to pool their low-cost-basis stocks in a fund. In exchange for contributing their stock to the fund, each investor owns a pro-rata share of the fund. After a set period of time - generally seven years - investors can redeem their interest in the fund. They will receive a non-taxable, distribution of a diversified pool of stock from the fund's portfolio. The value of this distribution is equal to the net asset value of their pro-rata interest in the fund at the time of the distribution. The stock distributed from the fund will retain in the aggregate the low cost basis of the stock originally contributed to the fund. There is always the possibility that the U.S. tax code could change, disallowing the favorable tax treatment of exchange funds. These changes could be retroactive, although this is believed to be unlikely.


Managed Futures

The Citigroup Managed Futures (CMF) unit of Citigroup Alternative Investments provides access to global futures and commodities markets by employing professional money managers called Commodity Trading Advisors (CTAs). To learn more about managed futures, contact us at one of our global offices.


Structured Alternative Investments

The Structured Alternative Investments (SAI) group of Citigroup Alternative Investments follows a fundamental as well as a quantitative approach to investment in primarily liquid markets. All investment strategies are carefully researched, analyzed and structured to increase their potential for delivering the investment objective. The strategies may have features such as fixed income alternatives, generating cash flow, and may employ leverage and diversification strategies, as well as strategies that attempt to reduce the risk of loss.

SAI benefits from an integrated product development, investment management, operations and technology platform that draws upon professionals who have experience in investments, research, structured finance, liability management, risk analytics, client servicing, operations, technology, legal and accounting.

The products range from single- to multi-strategy funds with varying degrees of risk, return and diversification profiles. SAI products may also take the form of directional and non-directional single-manager hedge funds or specialized investment vehicles that can be accessed through managed accounts, closed or open-end funds or portfolios that are designed according to the investment needs of institutions and qualified individual investors.

Our proprietary investment and strategy selection and execution process includes a careful evaluation of each strategy, the development of risk management and investment guidelines, identifying and contracting third party service providers who, in our opinion, can best execute the strategies selected at any given time and, finally, active management of both the assets and the liabilities of the funds. As always, past performance is not a guarantee of future results.

Qualified investors should be aware that these products carry a high degree of risk, often relating to such features as leverage, derivative strategies, credit exposure, limited liquidity, early redemption, adverse market movements in connection with arbitrage strategies and conflicts of interest.



This site does not constitute an offering and is meant only to provide a broad overview for discussion purposes. All information provided here is subject to change. If and when an investment opportunity is structured, all investors must obtain and carefully read the related Offering Memorandum, which will contain the information needed to evaluate the potential investment and provide important disclosures regarding risks, fees and expenses. No offer of any interest in any product will be made in any jurisdiction in which the offer, solicitation or sale is not authorized, or to any person to whom it is unlawful to make such offer, solicitation or sale.


Investing in alternative investments is speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include:


  • loss of all or a substantial portion of the investment due to leveraging, short-selling or other speculative investment practices;
  • lack of liquidity in that there may be no secondary market for the fund and none expected to develop;
  • volatility of returns;
  • restrictions on transferring interests in the fund;
  • potential lack of diversification and resulting higher risk due to concentration of trading authority with a single advisor;
  • absence of information regarding valuations and pricing;
  • delays in tax reporting;
  • less regulation and higher fees than mutual funds;
  • and advisor risk.

Past performance is no guarantee of future results.

The investment products described herein are not bank deposits; are not insured by the FDIC or any other governmental entity; are neither obligations of, nor guaranteed by Citibank, Citigroup or any of their affiliates; and are subject to investment risks, including possible loss of the principal amount invested.

Investing in managed futures products is speculative, not suitable for all investors, and is intended for experienced and sophisticated investors who are willing to bear the loss of their entire investment. Performance of these products may be volatile, and while they may provide the potential for positive returns in both rising and declining markets, the potential for loss is equal. Some of the important risks are: trading profits and interest income may not offset substantial fees; the ability to redeem interests may be limited and there may be no secondary market; conflicts of interest may exist in the management of an investment vehicle; advisors may be changed without notice to investors; and the vehicle may not be registered under the Investment Company Act of 1940. See the relevant offering materials for further discussion of risks.


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