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November 2, 2007

Carpenter Leaves Citi To Start Up Investment Group

by Stewart Douglas

Story link: Carpenter Leaves Citi To Start Up Investment Group

A former senior investment banker at Citigroup has today announced that he is to start his own investment operation with a $1 billion initial capital injection to acquire equity in other investment companies and hedge fund opportunities.

Former investment banker Michael Carpenter established his equity group Southgate Alternative Investment Strategies with a view to investing heavily in other speculative banking companies and fund managers over the course of the year.

Alongisde Carpenter the firm will also benefit from the expertise of Dean Barr, formerly also of Citigroup and former Credit Suisse boss Barbara Yastine, both of whom have left post to work within the new venture.

The announcement today saw the first attempt by the new firm to raise capital for its investment strategies, with the $1 billion investment likely to come from a variety of independent investment sources.

Traditional investment sources like insurance groups and private pension funds look likely to fund the mainstay of the investment total, with a view to seeing a stable return over the duration of the investment for the benefit of their shareholders or beneficiaries. 

It is also thought possible that some other groups, including educational establishments would be likely to invest in this round of fundraising by the fledgling New York company.

With a strong reputation arising from career track records at a senior level, analysts are predicting the firm to have little difficulty in raising its required investment pot, which it will then select to invest in other investment companies exclusively at this stage, as the market goes through a process of rapid expansion in light of asset devaluation linked to sub-prime failures.

The new firm is also thought to be planning to launch its own hedge funds linked directly to Asian markets and expanding areas of European investment, which will see it form separate entities for the purpose of liability limitation.

However the group will have to be careful to avoid over exposure to hedge fund investments in order to avoid the same fate as equity group Bear Stearns earlier in the summer.


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