New Hedge Fund Gets Seed Money From Citi, Blackstone

Date: Friday, February 27, 2009
Author: Dow Jones Newswire

A pair of former Citigroup Inc. (C) executives who are starting a $200 million hedge fund are getting most of their initial funding from Citi and Blackstone Group LP (BX), one of its founders said Thursday.

Jeff Jacob, who along with John Humphrey recently founded New York-based Archview Investment, said their Archview Credit Opportunities Fund will focus on corporate credit and distressed corporate assets.

He didn't say specifically how much Blackstone, the world's largest private equity firm, or Citigroup, were investing. He also didn't indicate what other investors may be involved.

"Basically, we took our group from Citigroup to start this ... it's not so much a start-up as a spin-off," Jacob said, adding about 10 people from Citigroup are part of Archview.

Their foray into hedge funds comes amid serious problems in the industry, which has shrunk in size to about $1.2 trillion from a record $1.9 trillion in early 2008. The losses by hedge funds are partly due to the sharp declines in equity markets, but also due to a surge in redemption requests by investors who need cash.

-By Dan Molinski, Dow Jones Newswires; 201 938-2245; dan.molinski@dowjones.com