New York-based SkyBridge Capital is in advanced talks to purchase Citigroup Inc's $4 billion hedge fund business, according to the Wall Street Journal.

Citi said last year it planned to offload billions worth of non-core assets amidst the global financial crisis and the U.S. government taking an ownership stake in the bank.

Citi is now in the process of selling about $1 billion of hedge fund investments, $2.5 billion in hedge fund assets that it advises directly, and $500 million worth of investments in small hedge funds, according to the Journal, which cited people familiar with the talks.

The Journal said that nothing had been signed and did not report a sale price.

Citi's core fund-of-fund investments were up about 21 percent in 2009, slightly better than average returns of hedge funds worldwide, according to the report.

The Citi team managing the $4 billion in assets is expected to keep their jobs. SkyBridge has historically taken a share of the fees the managers earn, the Journal said.

(Reporting by Clare Baldwin; Editing by Kim Coghill)

Citigroup