Citi-backed hedge fund service raises 400 mln euros

* Ivaldi set up by ex-Citi staff, Citi owns minority stake

* Launches with 400 mln euros in assets from pension fund

* Managed accounts more popular since credit crisis

LONDON, Sept 10 (BestGrowthStock) – Ivaldi Capital, a new investment
firm backed by Citigroup (C.N: ), has raised 400 million euros for
a service that lets pension and sovereign wealth funds buy hedge
funds via transparent accounts popular since the credit crisis.
The London-based firm, set up by former Citi staff including
head of prime broking sales Will Potts and part-owned by Citi,
will help institutions choose hedge funds or invest in start-up
funds, and will help them manage risk, Citi said in a statement.

Ivaldi has raised the 400 million euros ($507.5 million)
from one European pension fund, and said it expects further
inflows from seed investors.
“We’d expect that the 400 million euros would grow to nearer
1 billion euros from the first investor by the end of the year,
and potentially it could grow to 2 billion euros,” Mark
Harrison, Citi’s European head of prime finance, told Reuters.

Ivaldi’s institutional clients will buy into hedge funds via
so-called managed accounts — portfolios where the investor
still controls the assets, rather than owning units in a fund —
which have become more popular since the credit crisis.

Scandals such as Bernard Madoff’s $65 billion fraud and
moves by many hedge funds to deny clients access to their cash
during the crisis have persuaded many investors to use managed
accounts, which are often more transparent and let investors
sell when they want, although they can be more expensive.
Under the deal, Citi will be a prime broker — executing
trades and providing leverage — as well as administrator and

It builds on a mandate Citi won two years ago to give Danish
state pension fund ATP access to hedge funds.

Ivaldi plans to open offices in Asia and the U.S., Citi
(Editing by David Cowell)

($1=.7882 Euro)
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(Reporting by Laurence Fletcher)

Citi-backed hedge fund service raises 400 mln euros