Just 10 months after buying the hedge fund, Citigroup said Friday that almost all of the outside investors in Old Lane Partners are getting out.
The latest hedge fund blow to Citi is particularly embarrassing for the struggling banking giant, as Old Lane was co-founded two years ago by current Citi CEO Vikram Pandit. Citi Vice Chairman Lewis Kaden admitted last month that Citi bought the hedge fund—paying $800 million—to acquire the services of Pandit and fellow fund co-founders John Havens and Brian Leach.
Last month, Citi CFO Gary Crittenden said that clients would be permitted to redeem their investments in Old Lane because Pandit, Havens and Leach had left the hedge fund for other positions within Citi. In a Friday regulatory filing, the bank announced that most investors would exercise the opportunity to flee the underperforming hedge fund by July 31.
“In April 2008, substantially all unaffiliated investors had notified Old Lane of their intention to redeem,” Citi said in the filing.
The bank did not say that it planned to shutter the fund, instead insisting that it is “evaluating alternatives for the restructuring of Old Lane.”