Citi’s alternative investment profits soar 77%

Second quarter profit climbed 77 percent for Citi’s Alternative Investments arm, which invests in private equity, hedge funds and other alternative asset classes.

Citi’s private equity and hedge fund division increased its second quarter revenue by 77 percent as compared to the second quarter of 2006.

Citi Alternative Investments, which invests capital both for Citi and on behalf of third-party institutional and high net worth investors, posted profits of more than $1 billion (€746 million) in the second quarter of 2007, up from $456 million during the same period last year.

The growth “was primarily driven by higher revenues from proprietary activities, up 87 percent. Revenue growth reflected both realised and mark-to-market gains across private equity, hedge fund and other portfolios,” the bank said in a statement.

Client capital under management increased 55 percent, according to the statement.

Following the recent acquisition of Old Lane Partners, a $4.5 billion hedge and private equity fund founded by former Morgan Stanley executives, Citi Alternative Investments now manages $59 billion in assets.