The leadership team for Citi Capital Advisors (CCA) disclosed in a memo yesterday that the global alternative asset management platform for institutional and ultra high-net-worth investors will soon be under employee ownership separate from its parent company.
On Feb. 16, John Havens, firm chairman, Jon Dorfman, co-CEO, and CIO and co-CEO Jim O’Brien explained in an internal message to Citi employees that the plan to move CCA to employee ownership is the “next logical step” for the business.
CCA, which is run out of New York, London, and Hong Kong, manages assets across its more than “25 funds/managed accounts and three businesses: market strategies, private equity and infrastructure,” its Web site stated.
It pursues event-driven, distressed debt, corporate credit, multi-market and other investment strategies.
According to the Thursday memo, CCA was established in 2008 as the global financial services firm was planning to restructure its alternative investments component; CCA was planned to serve as its “client-focused alternative asset manager.”
“Since January of 2010, CCA has raised more than $2.6 billion of new client capital, and assets under management (AUM) has grown from $14.5 billion to $18.6 billion, with 70% of client AUM coming from sophisticated global institutional investors,” the executives explained.
The move was expected to serve “all of [its] stakeholders extremely well” as the CCA is expecting to capitalize on the alternatives market going forward.
“Institutional allocation to alternatives picked up meaningfully in 2011, and the trend is expected to continue as institutions look to add return and diversification to their portfolios,” the Citi memo explained, while noting that this “increase has favored larger platforms [such as CCA], with an estimated 65% of all hedge fund assets allocated to firms with more than $5 billion of AUM.”
This morning, Danielle Romero-Apsilos, a firm spokesperson, disclosed that decisions related to staffing and individual moves as a result of this move are still unknown as CCA is still in the “beginning stages of the transition.”