Still struggling with billions of dollars in subprime losses, Citigroup blocked nervous investors from bailing out of a hedge fund specializing in corporate debt, reports the Wall Street Journal. Investors tried to pull more than 30% of $500 million in assets from CSO Partners, which posted an 11% loss last year and was re-funded with $100 million from Citigroup last month.
Citigroup's alternative-investment products make up a relatively small $61.9 billion of Citi’s $2.4 trillion in assets, but they’ve performed poorly. Its Falcon Strategies hedge fund lost 52% in the fourth quarter and recorded a 30% loss for the year. The portfolio last year was under the guidance of Vikram Pandit, who became Citi’s CEO in December.