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

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

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 fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.