What to make of Citigroup's (NYSE: C) announcement that it will sell some hedge fund (hedge fund news) businesses, which have $4.2 billion worth of assets, to SkyBridge Capital? You could make the point, as many have, that the Volcker Rule, which is only a proposal, is having an effect on top banks already. This has prompted some to say that banks are leery of owning extensive private equity and hedge fund operations.

Citigroup was certainly expected to shed some assets in this area. You could also use the deal to suggest that consolidation continues in the hedge fund industry, underscoring the advantages that large firms now have. You could also interpret the news as yet another sign that Citigroup is serious about shedding assets. The unit to be sold includes a seeding business, an advisory businesses and a fund of funds business. They had been housed in Citi Holdings, the bad bank's repository for businesses it wants to sell, reports Reuters. 

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