Citi To Pull $410 Million From Paulson

Aug 24 2012 | 1:12pm ET

Citigroup's patience with Paulson & Co. is at its end.

The firm's private bank will redeem about $410 million from Paulson's flagship hedge funds, which posted double-digit losses last year and are on pace to do the same again this year, and two other hedge funds The Citi withdrawal amounts to more than 2% of the New York-based hedge fund's $19.5 billion in assets.

Citi's decision comes three months after it put Paulson on its watch list, making it ineligible to get any new money from the private bank for three months and warning clients not to add any new money. Paulson has long enjoyed a steady stream of new capital from bank hedge-fund platforms.

Morgan Stanley also put Paulson on watch at the time; it is unclear whether it plans to dump the hedge fund, as well.

Paulson's Advantage and Advantage Plus funds were available on the Citi platform. The latter, a more highly-levered version of the former, lost 51% last year and is down 18% this year. The firm's Merger and Recovery funds were also on the platform.

Citi's redemptions will begin between March of next year and March 2014.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.