Citigroup Inc. will close its $2 billion Tribeca Global Investments LLC hedge fund and return money to clients five months after it agreed to buy investment manager Old Lane LP, which uses a similar strategy.

“We believe we can best serve our clients by offering a single, multistrategy hedge-fund platform,” the president of the Citi Alternative Investments division and a founder of Old Lane, John Havens, 50, said in a memorandum to employees yesterday.

“Old Lane, with nearly $4.25 billion of assets under management, will be our flagship product.”

Vikram Pandit, 50, who started New York-based Old Lane in 2006 with Mr. Havens and other former Morgan Stanley colleagues, became head of Citi Alternatives July 2 as part of the bank’s $800 million acquisition of his firm. Citigroup’s alternatives division oversees about $59 billion including real estate and private-equity assets.

It has about $23 billion in hedge-fund assets, including client money allocated to outside managers.

“It would be very hard to differentiate two multistrategy funds under the same roof, but at the end of the day it’s all about performance,” a former managing director at the Charlotte, N.C.-based Duke Endowment who runs Atlanta-based investment firm Alpha Capital Management LLC, Bradley Alford, said. He is not an investor in Citigroup hedge funds.

Citigroup will “facilitate investments” in Old Lane by creating a feeder fund for clients of the bank’s Global Wealth Management division, which includes the Smith Barney brokerage, according to the memo. About 50 out of Tribeca’s 90 jobs will be cut, most of them in New York. A Citigroup spokesman, Jon Diat, declined to comment.

Tribeca clients will have the option of transferring their investment to Old Lane, the memo said. Clients who want their money back will be redeemed “over the next few weeks,” it said. Tribeca assets to be redeemed include $500 million managed for clients, leaving $1.5 billion belonging to Citigroup. About $400 million in convertible and Asian securities under Tribeca Global Management, which includes the Tribeca multistrategy hedge fund, will remain invested within Citigroup Alternatives.

In 2004, the bank said it hoped to attract as much as $20 billion to Tribeca after it hired Tanya Styblo Beder from New York-based hedge fund Caxton Associates LLC to oversee the investment pool.

Ms. Beder left a year ago. Dean Barr, who took over Tribeca after her departure, resigned in April, less than a week after Mr. Pandit’s team was named to run the private-investments group.