Citigroup Bails Out Troubled Falcon Hedge Funds

Feb 25 2008 | 1:00am ET

Citigroup has extended a half-billion dollar lifeline a group of its hedge funds rocked by the credit crunch.

The Wall Street giant said late Friday that it has provided a $500 million line of credit to its Falcon Strategies hedge funds. The bank has also consolidated the funds’ $10 billion in assets and liabilities on its own balance sheet.

The Feb. 20 decision comes after the funds lost approximately 30% last year. A new, levered version of the Falcon funds plummeted by more than 50% in its first three months of trading.

The hedge fund bailout is the second for Citi in as many months: The bank propped up its CSO Partners fund last month with $100 million, after suspending withdrawals.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...