SkyBridge Capital, the New York-based alternative investment firm, has opened an office in Zurich as the headquarters of its European operations.

SkyBridge, which recently acquired the fund of hedge funds, hedge fund seeding and hedge fund advisory businesses from Citi Alternative Investments, is looking to penetrate new markets by opening the Zurich office and launching a Luxembourg Sicav-SIF fund, SkyBridge Capital III, for European, Middle Eastern, Asian, Australian and Latin American investors.

The SkyBridge Capital III Fund is designed to capture the full spectrum of hedge fund investment opportunities globally and is timed to take advantage of recent market upheavals, the firm said in a statement. The overall target fund size is $500 million, with an anticipated initial close towards the end of 2010.

“There is strong market demand in Europe for our activities, boosted by the agreement to acquire CAI, and Zürich represents an ideal location. It offers a perfect combination of large numbers of high net worth individuals, family offices, private banks and institutions providing new capital for seeding hedge funds together with a base to source talented emerging hedge fund managers, " said Thomas John Gallagher, chairman of SkyBridge Capital's European division.