Ross Margolies, who runs $3.25bn for Citigroup in three different hedge funds, is quitting the bank this summer to set up his own hedge fund business.
The venture, yet to be named, is expected to be running by October.
Mr Margolies and his 50-strong team will still manage $3.25bn for the bank and have also made an arrangement to provide the bank with a "material" slice of future capacity in the new venture. The plan is to raise more assets in the coming months and set up new hedge fund products.
Mr Margolies, who runs arbitrage and equity strategies, joins the growing numbers of bankers who are quitting Canary Wharf and Wall Street to set up their own businesses in the fast-growing hedge funds sector.
A recent example is Eric Mindich, who made his name in the 1990s by becoming Goldman Sachs' youngest partner. He quit the bank last year and is now set to make a comeback in October with the launch of Eton Park, which will have up to $3bn in assets - making it one of the biggest launches ever.
Citigroup is also following competitors such as UBS and Deutsche Bank by developing an internal hedge fund platform to run both internal and external money.......
Banks have been keen to develop internal hedge funds, using them as a way to hold on to their in-house trading talent. However, the lure of big bonuses and greater autonomy prompts many managers to go it alone.
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