Citi Snags Pandit, $5 Billion Hedge Fund

Apr 13 2007 | 1:14pm ET

Citigroup is laying of 17,000 employees to cut costs, but the world’s largest bank is sparing no expense to procure the services of one man.

Citi has reportedly struck a deal with Vikram Pandit, a former Morgan Stanley executive, that will make him head of the firm’s Citi Alternative Investments division, and a possible future successor to CEO Charles Prince. The price? As much as $800 million for Pandit’s 13-month-old hedge fund, Old Lane.

The agreement is expected to be announced before Citigroup’s annual meeting on Tuesday, The Wall Street Journal reports.

The final price for Old Lane, an India-focused hedge fund that has raised $5 billion during its short life, will depend on the fund’s performance, meaning Citi could be on the hook for more (or less) than $800 million. The Journal reports that the fund returned 6.9% in the 12 months through February.

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