Wall Street Giants: One Feels Pain, Other Sees Gain

Jul 21 2006 | 5:43pm ET

Alternative investments buoyed one Wall Street giant in the second quarter, while another was burned in the sinking market.

Citigroup's profits from alternative investments fell by a third in the second quarter to $257 million from $385 million in the same quarter last year, as revenues from alternatives plummeted by nearly half. Second-quarter revenues dropped from $1.1 billion to $584 million. Citigroup blamed poor returns in its private equity and securities portfolios, though it said those losses were partly offset by high client revenues. Overall, Citigroup posted 4% increase in second-quarter income.

Merrill Lynch, meanwhile, saw its bottom-line boosted by stellar proprietary stock trading performance, even as hedge funds around the world suffered widespread losses. Proprietary trading revenue soared 84% for the quarter, as Merrill saw net earnings jump 44% to $1.6 billion on revenues of $8.2 billion. Meanwhile, BlackRock, which is buying Merrill Lynch Investment Managers, said hedge fund redemptions totaled $132 billion in the second quarter, though, overall, the firm's alternative assets under management rose $247 billion.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

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

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of