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Citi Blocks Hedge Fund Withdrawals

Posted Feb 15, 08 1:35 PM CST in Business 

(Newser) – 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.

Source Wall Street Journal

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A Citibank sign is shown on Tuesday, Nov. 27, 2007 in New York. The Abu Dhabi Investment Authority will invest $7.5 billion in Citigroup, offering the nation's largest bank needed capital to offset big...   (Associated Press)
Citigroup Inc. provided this file photo of CEO Vikram Pandit. Pandit, who replaced Charles Prince in December, said his company's fourth-quarter results were "unacceptable", and that he was "not yet...   (Associated Press)
The Citigroup Center is photographed Tuesday, Jan. 15, 2008 in New York. Citigroup Inc., stung by losses in the subprime mortgage industry,is struggling with other investments as well.   (Associated Press)
The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. has gotten $12.5 billion in much-needed cash from a batch of investors as it posted its first...   (Associated Press)
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