Pandit’s Work Cut Out For Him: CAI Profit Drops 37%

Apr 16 2007 | 8:59am ET

Vikram Pandit cannot work his magic soon enough at Citi Alternative Investments after Citigroup reported an increase in profits and its fastest-growing revenue in three years, no thanks to its alts unit.

Already the smallest of Citi’s four division, CAI posted the worst quarter of the four. Profit from alternative investments fell by 37% to $222 million, a decline blamed on lower revenue from hedge funds. Like that from alts, profit from consumer banking also fell, but only by 17% to $2.63 billion. Meanwhile, profit from investment banking rose almost 36% to $2.62 billion, and that from brokerage and private banking increased 56% to $488 million. All told, profit—excluding an $871 million charge attributed to the bank’s plan to cut 17,000 jobs—rose 4.3% in the first quarter to $5.88 billion.

Citigroup announced on Friday that it had hired Pandit, a former high-ranking Morgan Stanley executive, as the new CEO of CAI, buying his $4.5 billion India-focused hedge fund for as much as $800 million.

The firm’s recruitment of Pandit to head its alternative investments business has been followed by the expected departure of another high-profile hedge fund executive it recruited just 18 months ago.

Dean Barr, head of liquid alternative investments and, since the departure of Tanya Styblo Beder six months ago, the head of Citigroup’s in-house hedge fund Tribeca Global Management, is leaving the firm, the Financial Times reports. Barr, a former chief investment officer at Deutsche Asset Management, ran his own hedge fund, Thunder Bay Capital Management, before Citi came calling.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.