NEW YORK, Feb 22 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) said on Friday it has provided a $500 million line of credit to its Falcon multi-strategy fixed-income hedge funds, and as a result will move the funds' $10 billion of assets and liabilities onto its balance sheet.

The Falcon funds are managed by the largest U.S. bank's alternative investments unit. Citigroup said that by providing the credit facility, it becomes the funds' primary beneficiary, and as such must consolidate the funds onto its books.

On Feb. 15, the Wall Street Journal said Falcon Plus Strategies lost 52 percent in the fourth quarter, its first three months in existence, after making bets on mortgage-backed and preferred securities, and trades based on the relative values of municipal bonds and U.S. Treasuries.

The alternative investments unit was briefly headed last year by Vikram Pandit, who in December replaced Charles Prince as the bank's chief executive. Citigroup disclosed the credit facility and changes to its balance sheet in its annual report filed with the U.S. Securities and Exchange Commission. (Reporting by Jonathan Stempel; Editing by Tim Dobbyn)